XRP Market Cap Returns to Crypto Third, What's Driving Its Surge?

By: blockbeats|2024/12/02 16:30:02

Original Article Title: "XRP Market Cap Returns to Third in Crypto, XRP ETF One Step Ahead?"

Original Article Author: Wenser, Odaily Planet Daily

Latest data shows that XRP's market cap once surpassed $136.2 billion, surpassing USDT to reclaim its position as the "third largest cryptocurrency by market capitalization," returning to the level before the 2020 SEC/Ripple lawsuit.

Previously, Odaily Planet Daily elaborated on the "US Court ruling that Ripple did not violate federal securities laws" in August, as detailed in the article "XRP Surges Over 20%, Another Milestone Victory for Ripple in SEC Lawsuit." Nearly four months later, XRP's price has surpassed $2.30, nearly quadrupling, and the market is optimistic about XRP's future performance.

In this article, Odaily Planet Daily will summarize the recent situation and relevant information about Ripple and XRP for readers' reference.

Macro and Micro Factors Combine, XRP Market Cap Surges

According to Infinite Market Cap data, calculated with a market cap of $136.2 billion, XRP's market cap briefly exceeded China Life and ranked 139th in global assets; currently, its market cap has fallen to around $132.8 billion. Overall, XRP's market cap surge is mainly due to multiple positive factors at the macro and micro levels:

Macro Level: Trump's Presidency Expected to Help Settle the "XRP vs. SEC Dispute"

With Trump's successful election as the new US president, Ripple's 6-year debate with the SEC on "Is XRP a security" may finally see a final ruling, after all, as a "crypto-friendly president," Trump will play a positive role in the industry's future development.

At the same time, as an active participant in the US presidential campaign, Ripple had previously donated $45 million to PAC before the 2024 election, making it one of the largest donors to Fairshake alongside cryptocurrency exchanges Coinbase, Jump Crypto, and Andreessen Horowitz. Recently, it donated another $25 million to Fairshake, once again demonstrating its strong ambition to influence crypto political inclinations.

On the other hand, in the cryptocurrency advisory council that former President Trump is preparing to establish, a range of cryptocurrency companies including Circle, Ripple, Kraken, Coinbase, a16z, and Paradigm are vying for positions, seeking to have a voice in his planned U.S. policy reform, which has also set the stage for XRP's recent strong market performance.

Ripple CEO Brad Garlinghouse has also spoken out frequently, emphasizing the potential changes in cryptocurrency regulation under President-elect Trump's leadership, where he mentioned, "Ripple and XRP may be at a turning point, as the new pro-cryptocurrency regulatory shift is expected to bring new hope and possibly resolve years-long legal disputes."

He then pointed out, "The SEC has been intervening in the cryptocurrency market, picking winners and losers for 6 years now... and it has been 4 years since the SEC sued Ripple... Now, as these external (frankly unnatural and manipulative) market forces gradually dissipate, we finally see the light at the end of the tunnel. The tide is turning, headwinds are becoming tailwinds, and for those of us who believe in the future of XRP, the opportunity is immense." Moreover, in a previous interview, FOX Business reporter Liz Claman indirectly confirmed from his mouth that he had met with and discussed cryptocurrency with Trump.

In November, the U.S. SEC's lawsuit against Ripple progressed to "The Second Circuit Court of Appeals issuing an order requiring the SEC's litigation brief to be submitted by January 15, 2025." Subsequently, Judge Phyllis Hamilton approved a final judgment on the settled Ripple class-action lawsuit and ordered a stay on the remaining unresolved litigation, shortening the timeline for the class action lawsuit and paving the way for the trial to begin on January 21, 2025. Additionally, the current SEC Chairman Gary Gensler's previous statement of resigning around the time Trump takes office also fueled XRP's previous price surge.

Coincidentally, January 20th, the day before January 21st, is precisely Trump's first day in office. Thus, it can be said that Trump will play the role of the "key gentleman" in this "crypto industry versus regulatory agencies" showdown.

Micro Level: 1 Billion XRP Escrow Lockup, Stablecoin Launch Imminent

From the project's own development perspective, XRP may also be about to "turn over a new leaf."

One of the key reasons directly boosting XRP's price surge may be today's early morning "1 Billion XRP Token Lockup." According to Whale Alert monitoring, starting at 2:21 AM today, Ripple relocked 1 billion XRP in a custody wallet, worth approximately $15.46 billion. Previously, Ripple stated that it uses a custody account system to provide transparency and certainty to the XRP market. The company locks up the majority of its XRP holdings to ensure it does not oversupply the market and manipulate prices. However, the company also uses the XRP in custody accounts to invest in and support projects in the Ripple ecosystem. Releasing 1 billion XRP tokens per month from the custody account does not necessarily mean all of them will enter the market. Ripple may choose to sell some to institutions or retail investors, use some for its own purposes, or return some to the new trust.

Additionally, as a crypto payment company, Ripple plans to expand its footprint into the stablecoin space. In mid-November, according to official announcements, Ripple revealed it is set to launch the dollar-pegged stablecoin Ripple USD (RLUSD). RLUSD is a stablecoin designed for enterprise use cases such as payments, focusing on stability, efficiency, and transparency to enhance Ripple's cross-border payment solutions and meet the growing demand for USD-denominated transactions. There are reports that this stablecoin may launch on December 4th.

Previously, Ripple has also taken significant steps in driving industry partnerships. In October, digital asset infrastructure provider Ripple designated Uphold, Bitstamp, Bitso, MoonPay, Independent Reserve, CoinMENA, and Bullish as trading partners for the upcoming Ripple USD (RLUSD) stablecoin, supported by market B2C2 and Keyrock to provide liquidity. Additionally, according to official announcements, crypto payment infrastructure company MoonPay had previously announced a partnership with Ripple to enable users to purchase, store, and manage XRP using MoonPay accounts. In late November, Ripple also announced a partnership with Archax and UK asset management firm ABRDN PLC, planning to launch the first tokenized money market fund on the XRP Ledger.

With a series of positive news driving the momentum, Ripple and XRP are experiencing a "crypto spring."

Moreover, the XRP ETF will also take center stage in the cryptocurrency market, continuing to attract market attention.

Industry Insiders Positive About XRP ETF Going Live First?

As early as late October, Ripple CEO Brad Garlinghouse had previously stated that an XRP ETF is "inevitable." The main rationale behind this comes from the growing shares of Bitcoin spot ETFs. According to the latest data, the total on-chain holdings of the US Bitcoin spot ETF have surpassed 1.12 million BTC (approximately 1.128 million BTC), accounting for 5.7% of the current BTC supply; with an on-chain holding value of $108.9 billion.

XRP Market Cap Returns to Crypto Third, What's Driving Its Surge?

Dune Data Panel

At the same time, XRP has also received strong support from industry experts in various fields, mainly reflected in the following aspects:

XRP ETF Registrations Underway: WisdomTree Takes the Lead, Followed by Bitwise, Canary, 21 Shares

In late November, Fox Business reporter Eleanor Terrett wrote that global ETF provider WisdomTree has registered an XRP ETF in Delaware, USA. Currently, the company has confirmed that it is a legitimate filing, and it is known that WisdomTree manages assets over $100 billion.

Meanwhile, according to The ETF Store's President Nate Geraci's post: "There are currently 3 ETF applications holding the third largest cryptocurrency by market value, XRP.

Bitwise, Canary, and 21 Shares have all submitted applications for a spot XRP ETF. Speculation is that other issuers will join in as well."

"Grayscale Selects": XRP Now Included in Cryptocurrency Investment Portfolio

In early November, Grayscale officially announced that its XRP Trust Fund is now open to eligible accredited investors, providing investment opportunities to access XRP. XRP is the core token of the XRP Ledger, a distributed network that supports cross-border payments. Subsequently, at the end of November, Grayscale once again wrote that private placements for 17 token trust funds, including XRP, are now open to eligible accredited investors.

And the results have proved to be very wise: it turns out Grayscale's choice was spot on. According to statistics, Grayscale's cryptocurrency holdings saw a significant increase in value in November. According to Cryptorank data, its cryptocurrency holdings increased in market value by over 85% in the past month, with the increase mainly driven by tokens including XRP (which saw a price surge of over 262% during the same period).

Asset Management Giant Bitwise Becomes Ripple Partner

In November, Ripple announced its investment in the Bitwise Physical XRP ETP, with the specific investment amount undisclosed. It is understood that the Bitwise Physical XRP ETP, previously known as the "European XRP ETP," is part of Bitwise's suite of cryptocurrency funds.

Ripple CEO Brad Garlinghouse stated that the decision to invest in Bitwise's fund aligns well with the growing interest in exchange-traded products related to cryptocurrency assets. Subsequently, Bitwise officially announced that the Bitwise Physical XRP ETP (GXRP) has over $80 million in assets under management, with Ripple being one of the investors. The product is listed for trading on Deutsche Börse Xetra, allowing European investors to gain XRP exposure through GXRP.

Industry Figures Make Statements: Solana Ecosystem, BNB Ecosystem, ADA Ecosystem, and More Show Support

Just today, Solana co-founder toly made a post stating, "We need a national XRP reserve." This statement was also seen as echoing Trump's previous emphasis on "building a national strategic reserve of Bitcoin."

At the end of November, CZ retweeted news stating that due to XRP being classified as a commodity under the jurisdiction of the U.S. Commodity Futures Trading Commission, not a security, the U.S. Securities and Exchange Commission may drop the Ripple case. This information stemmed from a previous interview with former CFTC Chairman Chris Giancarlo.

Prior to this, Cardano (ADA) founder Charles Hoskinson had praised Ripple CEO Brad Garlinghouse in a post, referring to him as a "great CEO" and describing their interactions as "extremely cooperative." This public exchange sparked speculation that Cardano and Ripple might explore establishing a strategic partnership.

Data Perspective: Market Trading Activity High, Multiple Data Reach All-Time High

From a market data perspective, XRP is also one of the top performers.

In terms of the Korean market, Upbit's trading volume had increased by over 100% in seven days, with the major contributor being cryptocurrencies including XRP. In the fourth quarter, XRP's trading volume reached as high as $38.6 billion, far exceeding Bitcoin's $30.1 billion trading volume.

On the price front, XRP briefly broke through $2.29 USDT today, reaching a new high since January 2018.

Furthermore, in terms of futures contract data, according to Coinglass data, the global XRP futures contract open interest is 1.739 billion ETH, equivalent to about $40.51 billion, reaching an all-time high with a 24-hour increase of 20.34%. Among them, Bybit's XRP futures contract open interest is 548 million XRP (approximately $1.277 billion), ranking first with a 24-hour increase of 19.13%.

In terms of trading volume, as XRP broke $2, its 24-hour trading volume also exceeded $25 billion, currently reaching $25,338,798,676, with a trading volume to market cap ratio of 18.4%, indicating a high level of trading activity relative to its market cap.

On a side note, influenced by various positive news, the number of XRP-related posts on Platform X has reached a high of 480,000 posts, even surpassing the highly meme-able DOGE-related content.

One of the Platform X content metrics

If all goes well, an XRP ETF may become the "third cryptocurrency ETF" in the U.S. market following the BTC ETF and ETH ETF.

Conclusion: Where Is Ripple Headed With XRP?

As XRP's market cap once again reached pre-SEC/Ripple lawsuit levels, this six-year-long "first cryptocurrency regulatory case" originating from 2018 is about to reach its conclusion. Regarding the future of Ripple and XRP, there are different opinions in the market.

Previously, Yoshitaka Kitao, the CEO of the major Japanese financial services firm SBI Holdings, had stated that once the SEC issue is resolved, Ripple should prepare for an IPO as soon as possible. (Note: SBI Holdings has been collaborating with Ripple since 2017 to drive innovation in cross-border payments. Kitao is a key figure in the Ripple-SBI collaboration, having joined the Ripple board in April 2019. His long-term support for Ripple and XRP dates back to 2017 when he predicted XRP to be the global standard for digital currencies, emphasizing its efficiency, low transaction costs, and scalability.) Although similar proposals were previously put on hold by Ripple CEO Brad Garlinghouse, it can also be seen as one of the possibilities for Ripple's future direction.

After all, with the further improvement of the cryptocurrency regulatory environment, there may be more "cryptocurrency concept stocks" landing on the US stock market. At that time, Ripple and XRP may usher in another wave of development peaks.

Original Article Link

Editor's Note: Citrini7's cyberpunk-themed AI doomsday prophecy has sparked widespread discussion across the internet. However, this article presents a more pragmatic counter perspective. If Citrini envisions a digital tsunami instantly engulfing civilization, this author sees the resilient resistance of the human bureaucratic system, the profoundly flawed existing software ecosystem, and the long-overlooked cornerstone of heavy industry. This is a frontal clash between Silicon Valley fantasy and the iron law of reality, reminding us that the singularity may come, but it will never happen overnight.

The following is the original content:

Renowned market commentator Citrini7 recently published a captivating and widely circulated AI doomsday novel. While he acknowledges that the probability of some scenes occurring is extremely low, as someone who has witnessed multiple economic collapse prophecies, I want to challenge his views and present a more deterministic and optimistic future.

Never Underestimate "Institutional Inertia"

In 2007, people thought that against the backdrop of "peak oil," the United States' geopolitical status had come to an end; in 2008, they believed the dollar system was on the brink of collapse; in 2014, everyone thought AMD and NVIDIA were done for. Then ChatGPT emerged, and people thought Google was toast... Yet every time, existing institutions with deep-rooted inertia have proven to be far more resilient than onlookers imagined.

When Citrini talks about the fear of institutional turnover and rapid workforce displacement, he writes, "Even in fields we think rely on interpersonal relationships, cracks are showing. Take the real estate industry, where buyers have tolerated 5%-6% commissions for decades due to the information asymmetry between brokers and consumers..."

Seeing this, I couldn't help but chuckle. People have been proclaiming the "death of real estate agents" for 20 years now! This hardly requires any superintelligence; with Zillow, Redfin, or Opendoor, it's enough. But this example precisely proves the opposite of Citrini's view: although this workforce has long been deemed obsolete in the eyes of most, due to market inertia and regulatory capture, real estate agents' vitality is more tenacious than anyone's expectations a decade ago.

A few months ago, I just bought a house. The transaction process mandated that we hire a real estate agent, with lofty justifications. My buyer's agent made about $50,000 in this transaction, while his actual work — filling out forms and coordinating between multiple parties — amounted to no more than 10 hours, something I could have easily handled myself. The market will eventually move towards efficiency, providing fair pricing for labor, but this will be a long process.

I deeply understand the ways of inertia and change management: I once founded and sold a company whose core business was driving insurance brokerages from "manual service" to "software-driven." The iron rule I learned is: human societies in the real world are extremely complex, and things always take longer than you imagine — even when you account for this rule. This doesn't mean that the world won't undergo drastic changes, but rather that change will be more gradual, allowing us time to respond and adapt.

The Software Industry Has "Infinite Demand" for Labor

Recently, the software sector has seen a downturn as investors worry about the lack of moats in the backend systems of companies like Monday, Salesforce, Asana, making them easily replicable. Citrini and others believe that AI programming heralds the end of SaaS companies: one, products become homogenized, with zero profits, and two, jobs disappear.

But everyone overlooks one thing: the current state of these software products is simply terrible.

I'm qualified to say this because I've spent hundreds of thousands of dollars on Salesforce and Monday. Indeed, AI can enable competitors to replicate these products, but more importantly, AI can enable competitors to build better products. Stock price declines are not surprising: an industry relying on long-term lock-ins, lacking competitiveness, and filled with low-quality legacy incumbents is finally facing competition again.

From a broader perspective, almost all existing software is garbage, which is an undeniable fact. Every tool I've paid for is riddled with bugs; some software is so bad that I can't even pay for it (I've been unable to use Citibank's online transfer for the past three years); most web apps can't even get mobile and desktop responsiveness right; not a single product can fully deliver what you want. Silicon Valley darlings like Stripe and Linear only garner massive followings because they are not as disgustingly unusable as their competitors. If you ask a seasoned engineer, "Show me a truly perfect piece of software," all you'll get is prolonged silence and blank stares.

Here lies a profound truth: even as we approach a "software singularity," the human demand for software labor is nearly infinite. It's well known that the final few percentage points of perfection often require the most work. By this standard, almost every software product has at least a 100x improvement in complexity and features before reaching demand saturation.

I believe that most commentators who claim that the software industry is on the brink of extinction lack an intuitive understanding of software development. The software industry has been around for 50 years, and despite tremendous progress, it is always in a state of "not enough." As a programmer in 2020, my productivity matches that of hundreds of people in 1970, which is incredibly impressive leverage. However, there is still significant room for improvement. People underestimate the "Jevons Paradox": Efficiency improvements often lead to explosive growth in overall demand.

This does not mean that software engineering is an invincible job, but the industry's ability to absorb labor and its inertia far exceed imagination. The saturation process will be very slow, giving us enough time to adapt.

Redemption of "Reindustrialization"

Of course, labor reallocation is inevitable, such as in the driving sector. As Citrini pointed out, many white-collar jobs will experience disruptions. For positions like real estate brokers that have long lost tangible value and rely solely on momentum for income, AI may be the final straw.

But our lifesaver lies in the fact that the United States has almost infinite potential and demand for reindustrialization. You may have heard of "reshoring," but it goes far beyond that. We have essentially lost the ability to manufacture the core building blocks of modern life: batteries, motors, small-scale semiconductors—the entire electricity supply chain is almost entirely dependent on overseas sources. What if there is a military conflict? What's even worse, did you know that China produces 90% of the world's synthetic ammonia? Once the supply is cut off, we can't even produce fertilizer and will face famine.

As long as you look to the physical world, you will find endless job opportunities that will benefit the country, create employment, and build essential infrastructure, all of which can receive bipartisan political support.

We have seen the economic and political winds shifting in this direction—discussions on reshoring, deep tech, and "American vitality." My prediction is that when AI impacts the white-collar sector, the path of least political resistance will be to fund large-scale reindustrialization, absorbing labor through a "giant employment project." Fortunately, the physical world does not have a "singularity"; it is constrained by friction.

We will rebuild bridges and roads. People will find that seeing tangible labor results is more fulfilling than spinning in the digital abstract world. The Salesforce senior product manager who lost a $180,000 salary may find a new job at the "California Seawater Desalination Plant" to end the 25-year drought. These facilities not only need to be built but also pursued with excellence and require long-term maintenance. As long as we are willing, the "Jevons Paradox" also applies to the physical world.

Towards Abundance

The goal of large-scale industrial engineering is abundance. The United States will once again achieve self-sufficiency, enabling large-scale, low-cost production. Moving beyond material scarcity is crucial: in the long run, if we do indeed lose a significant portion of white-collar jobs to AI, we must be able to maintain a high quality of life for the public. And as AI drives profit margins to zero, consumer goods will become extremely affordable, automatically fulfilling this objective.

My view is that different sectors of the economy will "take off" at different speeds, and the transformation in almost all areas will be slower than Citrini anticipates. To be clear, I am extremely bullish on AI and foresee a day when my own labor will be obsolete. But this will take time, and time gives us the opportunity to devise sound strategies.

At this point, preventing the kind of market collapse Citrini imagines is actually not difficult. The U.S. government's performance during the pandemic has demonstrated its proactive and decisive crisis response. If necessary, massive stimulus policies will quickly intervene. Although I am somewhat displeased by its inefficiency, that is not the focus. The focus is on safeguarding material prosperity in people's lives—a universal well-being that gives legitimacy to a nation and upholds the social contract, rather than stubbornly adhering to past accounting metrics or economic dogma.

If we can maintain sharpness and responsiveness in this slow but sure technological transformation, we will eventually emerge unscathed.

Source: Original Post Link

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