XRP flips USDT as rally pushes market cap to all-time high

This is a segment from the 0xResearch newsletter. To read full editions, subscribe .

XRP’s stunning 380% rally in the past month has catapulted it into the crypto spotlight. It has not only flipped solana (SOL) in market capitalization, but also Tether (USDT) today. With a market cap already at all-time highs, and now a fully diluted valuation (FDV) twice that of SOL, XRP’s ascent reflects a mix of regulatory clarity, network adoption and speculative fervor.

Political winds and market sentiment

The conclusion of Ripple Labs’ protracted legal battle with the US SEC is one driver of XRP’s explosive growth. After years of uncertainty, the $125 million penalty imposed was far below the SEC’s initial $2 billion demand , removing a massive overhang on XRP and allowing institutional and retail investors to re-enter the market with confidence.

The significance of XRP’s legal victory transcends its price action, according to attorney John E. Deaton. Deaton is a prominent advocate for XRP holders who sued the SEC over its 2020 enforcement action. He referred to the SEC’s claim that all XRP tokens were illegal, regardless of their use case or the circumstances under which they were acquired, unprecedented “gross overreach.”

The US election has also played a role in XRP’s ascent. Trump’s victory has been interpreted as a signal not only for potentially more favorable cryptocurrency regulations, but also toward specifically favoring “homegrown” networks, initially launched by US companies.

That’s helped drive bids in similar stars of prior cycles .

Top performers (from the top 100) since the election (H/T Hsaka )

There’s also a nostalgia factor, says Mena Theodorou, co-founder at crypto exchange Coinstash.

“The resurgence of many of these older coins highlights the muscle memory of retail traders , who likely got their first exposure to the crypto markets through these coins and are now returning to their favourites as they re-enter the current bull market,” Theodorou told Blockworks.

The result is that, for many, XRP represents a “comeback story,” building momentum through both narrative and a bit of substance.

The rise of XRP memecoins

Another more recent factor in XRP’s expansion is the proliferation of memecoins on the XRP Ledger. Tokens such as DROP, SIGMA and RPLS have sparked interest among the gambling crowd (if they can figure out how to use the chain).

Low transaction costs and high throughput are available in every ecosystem these days, so this could be a temporary rotation play. Memecoins have a penchant to attract retail investors, but meme trading volumes on XRPL are a modest $78 million over the past 24 hours.

ETF speculation

Beyond memecoins and political tailwinds, speculation around the approval of XRP-focused ETFs is one final driver. As Bloomberg’s Eric Balchunas notes, the introduction of ETFs would likely “open the floodgates” for institutional capital. Newfound regulatory clarity has also positioned XRP as a viable alternative to Solana and Ethereum for institutional adoption simply because of its size, even as few in the technical community take it seriously.

XRP’s price action reflects this optimism, with the market pricing in a high probability of approval given recent developments.

Ripple CEO Brad Garlinghouse, for his part, has described an ETF as “inevitable.”

The crypto asset XRP has already attracted attention from firms like Bitwise and 21Shares, whose filings for ETFs could further legitimize and amplify XRP’s appeal to institutional investors. The SEC’s initial deadlines for a decision on the ETF filings are in May and June next year, respectively.

As the third-largest crypto asset, XRP is impossible to ignore. But whether it can sustain its newfound favor, however, will depend on its ability to translate hype into lasting adoption.

Start your day with top crypto insights from David Canellis and Katherine Ross. Subscribe to the Empire newsletter .

Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. Subscribe to the Forward Guidance newsletter .

Get alpha directly in your inbox with the 0xResearch newsletter — market highlights, charts, degen trade ideas, governance updates, and more.

The Lightspeed newsletter is all things Solana, in your inbox, every day. Subscribe to daily Solana news from Jack Kubinec and Jeff Albus.