XRP Gains Momentum Amid Crypto Market Boom
XRP, the cryptocurrency associated with Ripple Labs, has experienced a remarkable surge in market capitalization, gaining over $100 billion since Donald Trump’s election victory on November 5. Initially valued at $30 billion, XRP’s market cap has skyrocketed to approximately $150 billion, following a 32% increase in its token price, which reached $2.87 on Monday.
Ripple, founded in 2012 by Chris Larsen, David Schwartz, Arthur Britto, and Jed McCaleb, is a blockchain-based digital payment company that utilizes the XRP Ledger as its platform and XRP as its cryptocurrency. Unlike traditional banking systems, Ripple provides cross-border payment and crypto liquidity services to businesses, akin to the SWIFT system used by banks and financial institutions.
Interestingly, Ripple does not own XRP, which is an open-source cryptocurrency. The XRP token was created shortly after the XRP Ledger was launched in 2012, with a total supply of 100 billion tokens. XRP is designed to address the inherent limitations of Bitcoin, offering faster transaction times, lower costs, and reduced energy consumption.
The recent price increase of XRP can be attributed to a surge in demand, particularly from overseas investors in South Korea. According to Bloomberg, Edward Chin, co-founder of Parataxis Capital, noted that approximately $60 million in XRP short positions were liquidated within a 24-hour period, surpassing the total short liquidations for Bitcoin and Ether combined. “The move seems to be entirely retail-driven as nothing has fundamentally changed for XRP itself,” Chin stated. He added that while the price increase may appear excessive, it could continue due to the reflexivity inherent in the crypto market.
The surge in XRP’s price coincided with reports that New York’s top crypto regulator may approve the launch of Ripple’s stablecoin, providing a boost to the company. Ripple had previously launched a stablecoin pegged to the US dollar in October, following a significant legal victory against the Securities and Exchange Commission (SEC). The ruling determined that Ripple did not violate federal securities law by selling its XRP token on public exchanges, thereby exempting it from certain investor protection laws.
XRP’s impressive performance is part of a larger trend in the cryptocurrency market, which has gained approximately $1.2 trillion in value since Trump’s election. Bitcoin recently approached the $100,000 mark for the first time, while Ether reached a price of $3,613. Currently, Bitcoin boasts a market cap of nearly $1.89 trillion, with Ether’s market cap around $436 billion.
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