XRP Price Surge: What’s Driving the Recent Rise and What’s Next?

XRP, one of the most well-known cryptocurrencies in the market, has seen a dramatic surge in its price recently. At the start of December 2024, XRP reached a seven-year high, with its price peaking at $2.50. This surge has attracted widespread attention from investors, traders, and crypto enthusiasts alike. But what’s behind this sudden increase in XRP’s price? In this article, we’ll explore what XRP is, why its price has been rising, the recent release of Ripple’s RLUSD stablecoin, and what the future holds for XRP.

What Is XRP?

XRP is a digital currency created by Ripple Labs, a company founded in 2012 by Chris Larsen and Jed McCaleb. XRP is designed to serve as a fast, low-cost, and scalable cryptocurrency for global payments. Unlike Bitcoin and Ethereum, which are used mainly as store-of-value assets or for decentralized applications, XRP was created specifically for cross-border transactions.

Ripple, the company behind XRP, offers solutions to financial institutions and banks for sending international payments quickly and affordably. XRP is used as an intermediary currency, enabling cross-border transactions to be completed in just a few seconds, which can take days compared to traditional methods. The XRP Ledger, a decentralized blockchain, powers the XRP network, ensuring the currency's security and efficiency.

While Ripple and XRP have been synonymous for years, it is important to note that XRP operates independently of Ripple’s business, although Ripple has a significant stake in the cryptocurrency.

XRP’s Recent Price Surge

As of early December 2024, XRP reached a price of $2.80, marking its highest level in six years. This represents a 40% increase in just 24 hours and a 400% increase since November 1, 2024. XRP’s price has been on a steady climb, with notable gains in recent weeks.

Before this recent surge, XRP had spent years in a price range of about $0.40 to $1.00, and even saw its value dip during market corrections. However, the price increase starting in late November 2024 has been much more significant, catching the eyes of many in the crypto world. At its highest point, XRP briefly overtook Solana and Tether to become the third-largest cryptocurrency by market cap—something it hadn’t achieved in over four years. This increase has been especially impressive when compared to Bitcoin, which saw a 27% price increase over the same period.

XRP’s recent surge has made it a hot topic in the cryptocurrency community. But what is driving this remarkable price increase?

Why Is XRP’s Price Increasing?

Several factors have contributed to the dramatic rise in XRP’s price. These factors are interconnected, with both market sentiment and regulatory developments playing key roles. Let's explore the top reasons why XRP’s price has skyrocketed.

1. The Impact of Donald Trump's Election Victory

One of the most significant events that triggered XRP’s price rally was the victory of Donald Trump in the U.S. presidential election in November 2024. The election result sparked renewed optimism in the crypto market, with investors anticipating pro-crypto policies from Trump’s administration. Trump’s pro-business, anti-regulation stance is seen as beneficial for the cryptocurrency industry, and many believe that his presidency will usher in a more crypto-friendly regulatory environment.

Ripple CEO Brad Garlinghouse has been vocal about the potential positive impact of Trump’s victory on Ripple and XRP. He has expressed confidence that the new administration will reduce regulatory pressure on cryptocurrencies, including XRP. XRP’s surge began soon after the election, as investors bet on a more favorable environment for Ripple’s operations.

2. Positive Regulatory Developments

Regulatory uncertainty has long been a significant challenge for Ripple and XRP. For years, Ripple has been engaged in a legal battle with the U.S. Securities and Exchange Commission (SEC), which accused Ripple of selling XRP as an unregistered security. This lawsuit has weighed heavily on XRP’s price, as many investors were unsure of how the case would be resolved.

However, recent developments suggest that the regulatory pressure on Ripple may be easing. SEC Chairman Gary Gensler, who has been a staunch critic of cryptocurrencies, announced his resignation shortly after Trump’s election. Gensler’s departure is seen as a positive sign for Ripple and the broader crypto industry, as it may signal a shift in the SEC’s approach to digital assets.

Additionally, a court ruling in August 2024 was in favor of Ripple, stating that its sale of XRP did not violate securities laws. Although the SEC appealed this decision, the ruling sent a strong signal that Ripple might be able to resolve its legal issues in its favor. Many investors view these legal victories as crucial factors contributing to XRP’s price surge.

3. Increased Trading Activity and Investor Sentiment

Another reason behind XRP’s price increase is the growing interest from both retail and institutional investors. In November 2024, retail trading app Robinhood relisted XRP on its platform, allowing a broader audience to invest in the token. The relisting helped to boost XRP’s liquidity and trading volume, attracting more retail investors who may have been waiting for an opportunity to buy XRP.

Moreover, trading activity on CEX platforms has been particularly strong. Whales—large investors—have been driving XRP’s rally, creating a price premium for the cryptocurrency on exchanges compared to more retail-focused platforms. South Korean investors have also been active in trading XRP, further boosting its price.

4. The Emergence of XRP ETFs

XRP’s surge has been fueled by speculation that the cryptocurrency could soon be approved for a spot exchange-traded fund (ETF). Bitcoin and Ethereum both saw massive price increases after their respective ETFs were approved in 2024. XRP enthusiasts believe that Ripple could follow suit, with an ETF bringing further legitimacy and mainstream adoption to XRP.

Ripple CEO Garlinghouse has said that he believes an XRP ETF is “inevitable.” Several companies, including Bitwise Asset Management and WisdomTree, have already filed for XRP spot-ETF approval with the SEC. If XRP ETFs are approved, they could provide a significant boost to the token’s price, attracting more institutional investors and pushing XRP toward its all-time highs.

Ripple’s RLUSD Stablecoin Release and Its Impact on XRP

Another major factor contributing to XRP’s recent price surge is the launch of Ripple’s RLUSD stablecoin. The stablecoin, which is backed by USD deposits, short-term U.S. Treasuries, and cash equivalents, was officially released on December 4, 2024. RLUSD is set to operate on Ripple’s XRP Ledger and Ethereum, with plans for future expansion to other blockchains and DeFi protocols.

The RLUSD stablecoin aims to serve institutional investors, offering a compliant and efficient way to transfer funds and settle transactions across different blockchain ecosystems. It is also designed for cross-border payments and stable value retention. Since Ripple has been actively working to integrate stablecoins like RLUSD into its cross-border payment solutions, this development could have a major impact on XRP’s price.

Increased Utility for XRP: RLUSD will be paired with XRP to provide liquidity and stabilize its price. This creates a more interconnected ecosystem between RLUSD and XRP, increasing XRP’s role in global payments. As more financial institutions adopt RLUSD, the demand for XRP will likely increase as well, potentially driving its price even higher.

Growth of Ripple’s Ecosystem: Ripple’s move into stablecoins signals the company’s intention to become an even bigger player in the global payments industry. If Ripple succeeds in promoting RLUSD and integrating it with XRP, it will open up new avenues for XRP to be used in various financial applications, creating more demand for the cryptocurrency.

Attracting Institutional Investors: RLUSD is mainly targeting institutional players—large-scale investors, banks, and financial institutions. RLUSD could attract institutional investors who are looking for a stablecoin solution that is both compliant with regulatory standards and integrated with Ripple’s broader payment network. As RLUSD gains traction, it could drive further demand for XRP, helping to sustain its price growth.

What’s Next for XRP?

Despite the overall positive outlook for XRP, there have been some recent price fluctuations, with the cryptocurrency seeing a slight decline in early December 2024. On December 3, 2024, XRP dropped by around 8%, largely due to political turmoil in South Korea. President Yoon’s declaration of martial law in South Korea triggered panic selling, and XRP’s price dropped sharply on South Korean exchanges. The impact of this sudden downturn was felt across the broader cryptocurrency market as well, causing a temporary halt in XRP’s rally.

Furthermore, there has been a surge in profit-taking among XRP investors, with more than $4 billion in profits realized over a short three-day period. As more XRP tokens are moved onto exchanges, it indicates that investors are selling to lock in profits. Additionally, XRP's Relative Strength Index (RSI) has recently surged above 70, indicating that the asset is overbought and could be due for a short-term correction.

The question on many investors’ minds is: Will XRP’s price go back up? Based on current trends, there are reasons to believe that XRP could continue to see significant gains in the future.

Although external factors like political instability and profit-taking have caused the recent short-term dip, XRP’s long-term prospects remain strong. Ripple’s legal victories and the increasing adoption of its technology suggest that XRP’s price could continue to rise as institutional demand grows. Additionally, the launch of RLUSD could further drive XRP’s value, as it will be integrated into Ripple’s ecosystem and provide additional liquidity.

Analysts have predicted that XRP could hit as high as $6.60 by 2025. The ongoing improvements in Ripple’s legal situation, the increasing market adoption of XRP, and potential institutional products like an XRP ETF all point to a bullish outlook. The market is anticipating that XRP’s price could see long-term growth if Ripple continues to succeed in its legal battles and expands its network’s adoption.

XRP has established key support levels, with $2.30 and $1.45 acting as strong price points where bulls have defended their positions. On the upside, analysts are eyeing the $3.00 level as a psychological barrier, with the next target being its all-time high of $3.80. However, analysts also caution that the RSI levels suggest that XRP might need to cool off before breaking through these levels.

Conclusion

In conclusion, XRP’s price surge has been driven by a combination of legal victories, growing institutional interest, and the broader positive sentiment in the cryptocurrency market. The release of Ripple’s RLUSD stablecoin is expected to further drive demand for XRP, solidifying its role in the global financial ecosystem. While there may be short-term corrections or fluctuations due to external factors like political instability or profit-taking, XRP’s long-term outlook remains positive.

For investors wondering whether XRP will continue to rise, the answer depends on both internal developments at Ripple and external market conditions. However, based on current trends and the promising future of Ripple’s blockchain technology, XRP could very well see further price increases in the coming months and years.

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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.