Author: Osato Avan-Nomayo, DL News; Compiler: Tao Zhu, Golden Finance
XRP surged to $2.48 on Monday, hitting a six-year high and becoming the world's third-most valuable cryptocurrency.
While still below its 2018 high of $3.40, Arthur Azizov, CEO of enterprise crypto payment platform B2BinPay, pointed to a number of factors that suggest the cryptocurrency issued by U.S. blockchain company Ripple could break that record.
Trump's victory
Donald Trump's victory in the U.S. presidential election on November 5 was one of the main reasons, Azizov said.
The Republican candidate's victory sparked a return of bullish enthusiasm in the cryptocurrency market as investors bet that the president-elect will fulfill his promise to support cryptocurrencies. Since the election, the cryptocurrency market has surged 42% to $3.5 trillion.
Ripple CEO Brad Garlinghouse said Trump will "make crypto great again."
Garlinghouse has reason to be optimistic. XRP has risen fivefold since Nov. 5, outperforming percentage gains for prominent cryptocurrency rivals Bitcoin, Ethereum and Solana.
Trading Frenzy
XRP's price surge also came amid a trading frenzy, coinciding with Robinhood relisting XRP on its platform last month.
In 2020, the U.S. Securities and Exchange Commission charged Ripple with allegedly selling cryptocurrencies in violation of securities laws, and the trading app delisted XRP after it came under regulatory scrutiny. In August, a U.S. judge fined Ripple $125 million. For his part, Garlinghouse called the ruling a win for the company.
Coinbase whales are driving XRP higher, said Ki Young Ju, CEO of crypto analytics platform CryptoQuant.
Young Ju said intense XRP trading activity on Coinbase has led to a price premium for the cryptocurrency compared to more retail-focused platforms such as Upbit.
Data from crypto analytics platform Scopescan suggests that South Korean retail investors have also contributed to the surge in XRP prices.
In the past 24 hours, XRP trading volume on exchanges in Asian countries such as Upbit and Bithumb has surpassed Bitcoin.
Gary Gensler
The resignation of SEC Chairman Gary Gensler was also cited as a reason for the rise in XRP prices.
Gensler's tenure was hostile to the cryptocurrency industry. His departure on January 20, the day of Trump’s inauguration, was seen by many as a positive sign for Ripple.
XRP’s price gains had been held in check by Ripple’s long legal battle with the agency. Azizov noted that with Gensler’s departure, that fight could be over, which could lead to more growth for the cryptocurrency.
Altcoin Rotation
Bitcoin surged to nearly $100,000 after Trump’s victory.
Meanwhile, Bitcoin’s dominance, or its market size as a percentage of the total cryptocurrency market value, has fallen to 53% from 60% last week.
Cryptocurrency research firm 10x Research said in an article last week that Historically, as the cryptocurrency market value increases, a decline in Bitcoin dominance usually marks the beginning of altcoin season, when attention shifts to other cryptocurrencies such as XRP.
XRP ETF
Following the success of spot Bitcoin and Ethereum exchange-traded funds this year, Solana and XRP are racing to become the next cryptocurrency to receive ETF approval.
Garlinghouse himself has said he believes an XRP ETF is "inevitable."
Bitwise Asset Management, Canary Capital, 21Shares and WisdomTree have filed XRP spot ETF documents with the SEC.
André Dragosch, head of research at Bitwise Europe, said in a research note last week that if an XRP ETF is approved, it could push prices higher.
With Trump taking office next year, market analysts predict that the path to launching more cryptocurrency ETFs could become easier.
Especially if Trump chooses a crypto-friendly figure to lead the SEC.