Why Is XRP Skyrocketing?

Altcoin season is here! In just under a month, XRP has erased the losses of the past three and a half years, surging by over 400% to reach levels not seen since 2018. This November, it wasn't Bitcoin (BTC), Solana (SOL), or even the frenzy of meme coins that took center stage, but Ripple (XRP) stood out on its own, with a sharp and significant price rise that sent the market into a frenzy.

Source: Bitget

Now it's time to take a closer look at why XRP's price rose so quickly and what might come next for XRP.

Factors Contributing to XRP's Surge

XRP's rapid price rise is mainly due to positive news and growing enthusiasm from investors. Here are the three key reasons:

1 - Progress in the SEC Lawsuit

The prolonged lawsuit between Ripple and the U.S. Securities and Exchange Commission (SEC) has long been a major drag on XRP’s price. However, in November 2024, there was a surprising twist. The United States Court of Appeals for the Second Circuit ordered the SEC to submit its lawsuit brief by January 15, 2025. Shortly after, Judge Phyllis Hamilton approved a final ruling on the resolved Ripple class-action lawsuit and paused other pending lawsuits, allowing trials to begin by January 21, 2025.

On top of that, current SEC Chair Gary Gensler hinted that he might resign around the time of Trump's return to power, which further boosted XRP's price. These updates showed that Ripple might have a legal advantage, which boosted investor confidence.

2 - Expansion of Institutional Partnerships

Ripple has also been expanding its industry partnerships. In October, Ripple appointed Uphold, Bitstamp, Bitso, MoonPay, Independent Reserve, CoinMENA, and Bullish as trading partners for its upcoming Ripple USD (RLUSD) stablecoin, with liquidity support from B2C2 and Keyrock. Additionally, MoonPay, a crypto payments company, partnered with Ripple to let users buy, store, and manage XRP through their MoonPay accounts. In late November, Ripple also announced partnerships with Archax and UK asset manager ABRDN PLC, with plans to launch the first tokenized money market fund on the XRP Ledger.

3 - Stablecoin Launch

As a crypto payments company, Ripple is planning to expand into the stablecoin market. In mid-November, Ripple announced the launch of Ripple USD (RLUSD), a stablecoin focused on corporate use cases. RLUSD aims to provide stability, efficiency, and transparency, enhancing Ripple's cross-border payment solutions and meeting the increasing demand for USD-based transactions, with a potential launch in December.

Moreover, multiple sources have suggested that an XRP ETF could be next in line after Bitcoin and Ethereum ETFs. At the end of November, Fox Business reported that global ETF provider WisdomTree registered an XRP ETF in Delaware, and the company confirmed the filing. WisdomTree currently manages over $100 billion in assets. Nate Geraci, President of The ETF Store, also mentioned that Bitwise, Canary, and 21 Shares have already submitted applications for XRP ETFs, with more issuers expected to join.

The Future of XRP

From a technical perspective, XRP faces significant short-term selling pressure, especially since its recent price trend closely resembles the parabolic movement seen in 2017. Back then, XRP/USD broke out of a years-long symmetrical triangle, surging from below $0.01 to nearly $3.55, its all-time high. In 2024, after consolidating within a similar triangle for over three years, XRP seems to be making a comparable breakout.

XRP/USD Monthly Price Chart. Source: TradingView

Even though XRP faces technical resistance in the short term, its market cap briefly returned to pre-SEC lawsuit levels. The market seems optimistic as this six-year legal saga, which started in 2018, is nearing its conclusion. The future for Ripple and XRP looks increasingly positive.

Earlier, Yoshitaka Kitao, CEO of Japanese financial giant SBI Holdings, suggested that Ripple should prepare for an IPO once the SEC issue is resolved. SBI Holdings has been working with Ripple since 2017 to promote global payment innovation. Kitao, who joined Ripple's board in 2019, has been a key supporter of Ripple and XRP, predicting it would become a global standard for digital currencies due to its efficiency, low costs, and scalability. Although Ripple CEO Brad Garlinghouse previously dismissed similar suggestions, an IPO could still be a possibility for Ripple's future. As the regulatory environment for cryptocurrencies continues to improve, more "crypto concept stocks" may enter the U.S. markets, potentially driving another growth wave for Ripple and XRP.

Trade XRP on Bitget today!

Disclaimer: The opinions expressed in this article are for informational purposes only. This article does not constitute an endorsement of any of the products and services discussed or investment, financial, or trading advice. Qualified professionals should be consulted prior to making financial decisions.