XRP leads the gains, and established currencies recover: a sign of the return of the alt season?

Written by: Chandler, Foresight News

The price of Bitcoin has repeatedly hit new highs, breaking through the $99,000 mark, driving the activity of the entire cryptocurrency market. Old-brand altcoins have also emerged one after another, among which Ripple (XRP) has performed particularly well. According to Bitget market data, on November 22, XRP broke through 1.4 USDT and is now quoted at 1.416 USDT, with a 24-hour increase of more than 30%.

Compared to the hot Meme market, old-brand altcoins seem to be quietly rising. They are not as eye-catching as Meme coins, but they are accumulating market attention with a steady increase.

According to Kaiko data, as of November 18, the weekly trading volume of altcoins soared to more than $300 billion for the first time since 2021. Among them, the trading volume of the four major tokens DOGE, XRP, SOL and PEPE accounted for 60% of the total trading volume.

Since November, XRP has quietly risen from around $0.5 to a maximum of $1.435, an increase of 182.4%, a new high in more than three years; ADA has risen from $0.33 to $0.9, an increase of nearly 170% this month; XLM has risen from $0.09 to $0.294, an increase of more than 220%, etc. These signs seem to show that the old altcoins are gradually getting rid of the downturn and reshaping their position in the market with actual performance.

If this trend continues, the recovery of old-line currencies and the activeness of hot tokens will interweave, and the market may usher in a wider "altcoin season" in the future.

Gary Gensler officially announced that he will step down soon, and years of litigation may end

XRP's recent strong rise is hidden behind the interweaving of multiple factors. The change in market sentiment is undoubtedly the most direct driving force.

On July 13, 2023, Ripple won a partial victory when the court determined that XRP sales on digital trading platforms were not considered securities. However, the court determined that XRP sold by Ripple to institutional investors were unregistered securities. In addition, the court ruled that Garlinghouse and Larsen's personal XRP sales did not constitute a violation. On August 7, 2023, the court made a final judgment requiring Ripple to pay a civil penalty of $125,035.1 million and prohibiting the company from further violating the Securities Act.

On October 3, the US SEC said it was appealing the US Second Circuit Court of Appeals' previous ruling on Web3 payment company Ripple. An SEC spokesperson believed that "the local court's ruling in the Ripple case conflicts with decades of Supreme Court precedent and securities laws. We look forward to stating our reasons in the Second Circuit Court."

But with Trump's victory in the election, this regulation may be eased.

On November 22, according to the official website of the US SEC, SEC Chairman Gary Gensler will officially step down on January 20, 2025. The market has begun to have strong expectations for changes in the future regulatory environment, and lawsuits against companies such as Ripple may be softened, settled or even withdrawn.

Gary's long-term strict regulation of the crypto industry, especially Ripple, has put XRP in a double dilemma of law and market. Today, this regulatory stance may show signs of loosening, giving the market an opportunity to re-examine the value of XRP.

From the data point of view, according to CoinGlass data, the open interest (OI) of XRP futures contracts has reached nearly US$2.44 billion, a record high. This data reflects that the market's speculative enthusiasm for XRP has reached an unprecedented height. Open interest refers to the total amount of active futures or options contracts that have not been closed and settled, and is generally regarded as an important indicator of market activity and trading enthusiasm.

Institutions are scrambling to lay out ETFs

In addition to regulatory easing, multiple institutions have also begun to apply for XRP ETFs.

On October 2, a spokesperson for Bitwise confirmed that Bitwise submitted an application for an XRP ETF, which had been formally submitted on the Delaware government website. According to the S-1 registration document for its XRP ETF submitted to the U.S. SEC, the XRP custodian will mainly use cold storage to store the trust's assets, and transfer a limited number of assets to hot storage as needed to achieve efficient basket creation and redemption.

A week later, cryptocurrency investment institution Canary Capital submitted an application for registration of the XRP spot ETF "Canary XRP ETF" to the US SEC. It plans to provide investors with an investment channel without directly holding XRP through ETFs, while using CME's CF Ripple Index as a price tracking benchmark. Its founder Steven McClurg said that positive changes in the regulatory environment and investors' demand for diversified crypto assets are the main reasons for this application.

On October 16, Grayscale Investments submitted an application to the US SEC to convert its hybrid crypto fund Digital Large Cap Fund (GDLC) into an exchange-traded fund (ETF). As of September 30, the fund was mainly composed of Bitcoin, accounting for 74.7%, followed by Ethereum, accounting for about 18.55%, and the rest was composed of SOL, XRP and AVAX. The company has previously converted Bitcoin and Ethereum funds into ETFs.

On November 2, 21Shares submitted an application for XRP ETF "21Shares Core XRP TRUST" to the US SEC.

These successive applications show that XRP's market position as a crypto asset is steadily recovering, reflecting the market's confidence in XRP's future potential. After Ripple's legal dispute with the SEC made phased progress, market concerns about the legality of XRP have eased. Against the backdrop of the approval of Bitcoin and Ethereum ETFs, the wave of applications for XRP ETFs is undoubtedly an important signal for the industry to move forward.

Is there hope for the return of altcoins?

The CMC Cryptocurrency Altcoin Season Index is a real-time indicator used to determine whether the current cryptocurrency market is in an altcoin-dominated season. The index is based on the performance of the top 100 altcoins relative to Bitcoin over the past 90 days, providing detailed charts and indicators to track market trends and the market share of altcoins.

From the chart and index data, CMC's cryptocurrency altcoin season index currently shows 27/100, which shows that the market is still mainly dominated by Bitcoin, and altcoins have not yet fully entered a strong dominant position. But the trend of changes in the past 7 days is worth paying attention to. The altcoin season index has gradually climbed from the low point of the 17th, and jumped significantly to 28 on the 21st, showing that the market's interest in altcoins is recovering.

Combined with historical data, although the current index is far below the annual high of 50, it has rebounded significantly from the low point of 13 at the beginning of this month. This upward trend may mean that the market's funds are gradually rotating from mainstream assets such as Bitcoin to the altcoin sector. Especially against the backdrop of the recent strong performance of established altcoins such as XRP and ADA, this trend may be further strengthened.

At the same time, the market value of altcoins is also growing steadily. Although the growth rate has not yet reached a level sufficient to completely reverse the market pattern, its gradual stabilization and slight increase reflects the subtle changes in market sentiment. Investors are beginning to re-evaluate the value of altcoins and gradually shift their attention to these assets.

If this trend can continue and maintain a steady rise in the coming weeks, perhaps the altcoin season will officially arrive.

However, judging from the performance of the Top100 in the past 90 days, Meme coins, with their high speculative and social driving force, will still be difficult to shake in the short term.