A year ago, if you had told the general crypto community that, in 2024, XRP would reach the top to become the 3rd largest cryptocurrency, you’d probably be tagged “2024 biggest clown.”
However, on December 1st, 2024, XRP surprised the entire crypto community, surpassing Solana’s SOL and Tether’s USDT to become the 3rd largest cryptocurrency by market capitalization ($155 Billion) with the token experiencing a 300% increase in price.
This article will explore what happened to cause this surge and what the future looks like for Ripple (XRP).
How It All Began: The XRP Odyssey
In 2011, three developers – David Schwartz, Jed McCaleb, and Arthur Britto – started building XRP Ledger, called XRPL. They imagined a payment network, like Bitcoin, but without the wasteful side effects of Bitcoin. Jed even wrote about it in the Bitcoin Talk forum back in May 2011.
In 2012, they finally launched XRPL, a distributed ledger for payments. They envisioned XRPL to be an improved version of Bitcoin and thus, launched the native coin for it – XRP. It was not publicly tradable by then until the year after. In the same year, a new company called NewCoin was set up to back XRPL and explore use cases of XRP. NewCoin was renamed OpenCoin with Chris Larsen as CEO.
In 2013, OpenCoin was finally rebranded to what is now called Ripple Labs and XRP became available for public trading. You can learn more about the history of XRP here.
Ripple vs U.S. SEC Prolonged Battle
In December 2020, the U.S. Securities and Exchange Commission filed a lawsuit against Ripple, allegedly, for selling an unregistered security offering (XRP) to investors and raising more than $1 billion from it. In defense, Ripple argued that XRP is a digital asset and not a security. This lawsuit caused XRP’s market value and price to depreciate. Many crypto exchanges like Binance, Coinbase, and Kraken that had previously listed XRP for trading quickly announced that they were delisting it.
Source: CryptoRank
According to Howey Test, security, under U.S law, is an asset that meets the following criteria:
- The asset involves an investment of money
- The asset is part of a common enterprise
- Investors expect to make a profit from the asset later in the future
- The expected profit from the asset is driven by external parties
The SEC argued that XRP fell under this category of assets and should have been registered as security before conducting the sale. Recall that a few years before the Ripple lawsuit, ICOs had been banned in some countries and heavily regulated in others because they were considered security sales that must be registered and approved before they could occur.
Cryptocurrencies like Ethereum and Filecoin conducted ICOs to raise funds. In 2017 and 2018, hundreds of ICOs took place and it was unregulated. The U.S. SEC saw the Ripple suit as a perfect opportunity to exert punishment.
Ripple wasn’t the first cryptocurrency project that SEC had come after but it’s the one that’ll remain in the minds of many for years to come. Ripple has spent over $120 million in this fight with the SEC. The Ripple lawsuit battle lasted for years, until July 2023, when it had its partial win when Judge Torres ruled that XRP was not a security when it was sold to the general public but the same could not be said for institutional sales.
When the partial ruling was made, the SEC hinted at its plan to appeal the case and even filed it in October 2023, but it was denied then. On October 17th, 2024, the SEC again filed its appeal against the court’s partial ruling in favor of Ripple, although the deadline was the day before.
- Note that during all these, XRP’s price plummeted and didn’t see a significant rise when the partial ruling in favor of Ripple was made.
- The U.S. Court of Appeal has given the SEC until January 15th, 2025 to present its final argument in the case against Ripple.
- What is to be expected?
A New Chapter? XRP Becomes the 3rd Largest Cryptocurrency
For years, a larger percentage of the crypto community was bearish on XRP and doubted it would ever come out of its battle with the SEC victorious. So, it sent a shocking wave throughout the crypto industry when in early December, XRP surpassed SOL and USDT to take its spot as the 3rd largest cryptocurrency by market cap, just behind ETH (the 2nd largest cryptocurrency) and Bitcoin (the 1st largest cryptocurrency).
This marked a significant milestone for the cryptocurrency as it also hit $2.7 (~ 300% increase), almost nearing its ATH. Since then, XRP has topped charts and made headlines.
The screenshot above was taken from CoinGecko as of the date of writing (15th December 2024; 7:37 PM EST) and it shows that XRP is still taking the lead as the 3rd largest crypto.
What caused this surge? Speculations have been flying around as to what caused this surge in XRP’s market cap and price. Let’s take a look at them and the roles they played.
Gary Gensler Stepping Down As SEC Chairman
On November 21st, 2024, Gary Gensler announced on Twitter that he would be stepping down from his role as SEC Chair effective from January 20th, 2025. Check out the full announcement.
This news sent the entire crypto industry into a celebratory mode.
- Gary Gensler is a well-known crypto critic.
- His stance on labeling cryptocurrencies as securities has limited the growth of crypto projects in the United States.
- He advised against investing in crypto and filed over 120 lawsuits against crypto companies.
- Gensler was supposed to serve a 5-year tenure (2021 – 2026) but announced his resignation in January 2025.
- Many believe he resigned to avoid being fired by the newly elected President Donald Trump due to his stance against crypto.
Just a week after this news, XRP surged in price and crossed $100 billion in market cap for the first time since 2018.
- XRP became the 3rd largest cryptocurrency by market cap, after Bitcoin and Ethereum.
The news of Gary Gensler stepping down improved the market’s sentiment about XRP.
- Many believe that with Gensler stepping down, the SEC will lay off Ripple.
- This created more demand for the token, thus increasing its value and price.
Trump’s Pro-Crypto Administration
The sole reason many crypto users supported Trump is because of his public stance regarding crypto. Having a pro-crypto president, and by extension, administration is a win for the crypto industry. The United States can become a powerhouse of crypto. This is already being affirmed when, on the 4th of December 2024, Trump announced Paul Atkins as the new SEC Chair.
- Paul Atkins was an SEC commissioner many years back and has worked with organizations to promote the use of digital assets.
- According to this New York Times article, Trump chose someone more likely to take a lighter regulatory approach to crypto.
- He mentioned that Atkins believes in a future where digital assets and other innovations can be the driving tools to making America greater than it was before.
- This Forbes article mentioned that one of the things we can expect from a pro-crypto SEC is easing regulatory concerns.
The sentiment towards Trump’s administration is that:
- Crypto regulations that limit U.S.-based crypto companies from scaling will be reduced.
- With time, founders who moved their companies out of the U.S. to set them up in more crypto-friendly countries will return when conditions are favorable.
- Ripple is one of those companies that’d have a huge win with an administration that’ll approve better regulations.
- This also contributes to the high speculation and demand for the token.
XRP Army: The Soldiers That Never Left The Battlefield
Over the years, with Ripple’s long-standing battle with the SEC and the stagnant price of XRP, many became bearish on the token ever having a comeback.
Questions like “Why do people buy XRP?” have caused a lot of debates between XRP critics and the XRP army. This Reddit post that was published one year ago positioned XRP as a bad pick for the 2024 bull market seeing as it had been an underperformer for the past six years. Despite the criticisms and disappointing comments about XRP, those who believed never left and kept holding.
As the price of BTC kept a steady increase since Trump’s election win, TikTok influencers have been pushing the narrative that XRP is the next token to see that big breakthrough. During the last week of November and the first week of December, XRP gained the most mention under the crypto category on TikTok. A lot of people were talking about it on TikTok, new crypto users were searching for it, demand increased, and the token’s price surged.
XRP ETF: Rumors & Filings
Over the past few weeks, there have been rumors about financial institutions filing for XRP spot ETF. Asset management companies like BitWise, WisdomTree, Canary Capital, and 21Shares have applied to launch XRP ETFs in the U.S. Even with the fact that the SEC vs Ripple battle is not yet finally over, the speculation that it will end with Ripple on the winning end probably drove this decision.
The fake rumor that BlackRock (the world’s largest asset manager) filed for XRP ETF likely played a role in pushing these companies to apply too, although BlackRock refuted the claim and stated that they have no plans to file for XRP ETF anytime soon.
The XRP ETF applications boosted people’s belief. The normal users who have no direct interaction with ETFs are positioning themselves with XRP itself. This also caused XRP to surge in price and market cap.
What The Future Looks Like For XRP
The future outlook for XRP is that Ripple would likely win the case against the SEC. If this is the case, it becomes a win not just for Ripple but for the entire crypto industry, especially with a more crypto-friendly administration. Crypto companies registered in the United States will operate without the SEC breathing down their neck. This doesn’t in any way mean there wouldn’t be some sort of regulation over crypto.
On December 10th, 2024, Ripple announced that its stablecoin – $RLUSD – will be launching soon. It received the final regulatory approval from the New York Department of Financial Services (NYDFS) to launch the stablecoin which will be pegged to the value of the U.S. dollar at a 1:1 ratio. $RLUSD will launch on December 17th, 2024.
