XRP Soars 346% in a Month Due to ETF Hopes and Regulatory Changes

Key Takeaways

• With a market valuation of $130 billion, XRP has risen to $2.28, a 50% gain in a week and a 346% gain in 30 days.
• The increase has been driven by Ripple’s regulated token supply and hope over SEC Chair Gary Gensler’s resignation.
• Confidence is being bolstered by speculation over ETFs backed by XRP and rising activity in derivatives.

Ripple’s cryptocurrency, XRP, has surpassed the $2 threshold, marking its greatest value in nearly seven years.

This represents a notable recovery for the token, which last peaked in January 2018 at $3.40. With a current price of $2.28, XRP has increased by more than 50% in only one week and by an incredible 274% in the last 30 days. After Bitcoin and Ethereum, it is the third-largest cryptocurrency with a market capitalization of $130.2 billion.

Ripple’s tactical control of the token supply is a major driver of XRP’s surge. As part of its monthly distribution, 1 billion XRP tokens, worth $1.92 billion, were made available in December. The market has reacted favorably to worries about possible inflation, and XRP is still rising. In order to guarantee supply stability, Ripple now possesses 37.24 billion XRP tokens in escrow.

The SEC Resignation of Gary Gensler Encourages a Crypto Market Rally

The price increase of XRP has been fueled by the impending resignation of SEC Chair Gary Gensler. There is hope for a more crypto-friendly regulatory stance under the incoming administration as a result of Gensler’s tenure, which included close regulatory monitoring of cryptocurrency companies like Ripple. Many think that this shift could boost market confidence by resulting in a positive resolution to Ripple’s current legal battle with the SEC.

The recent price spike has also been fueled by speculation on an exchange-traded fund (ETF) based on XRP. Growing optimism over the legal environment is indicated by the enthusiasm shown by investment businesses like WisdomTree and Bitwise in introducing XRP-backed ETFs. The futures market for XRP is also experiencing previously unheard-of activity, with open interest rising 37% in a single day to an all-time high of $3.19 billion.

Despite the hype, experts warn of the volatility of the cryptocurrency market.

Experts in the wider market, like Forbes writers, caution about the volatility of leveraged trading, which has played a significant role in XRP’s recent price spike. Sharp price declines have been the outcome of previous speculative rallies; the most recent November spike saw a 17% decrease. Leveraged positions may increase market volatility and raise the possibility of large liquidations in the event of a sharp decline in prices.

XRP’s recent performance, which shows a notable increase from its all-time low of $0.127 in March 2020, demonstrates its substantial growth despite these concerns. The token has exceeded Solana and Tether in market cap. Even if it is still far behind its peak, XRP’s rebound shows that it has gained fresh vigor due to market speculation, regulatory reforms, and Ripple’s ongoing projects.