XRP, the cryptocurrency underpinning the XRP Ledger, has recently become a significant player in the digital asset market, particularly following the victory of Donald Trump in the recent presidential election. Since then, XRP’s price jumped dramatically by as much as 440%, reaching $2.86 — its highest since the cryptocurrency boom of 2017-2018. Prior to this surge, Forbes had described XRP as a “Zombie Blockchain,” indicating that despite its substantial market valuation of around $143 billion, it had failed to fulfill its initial purpose of replacing SWIFT for facilitating international interbank transfers, which are valued at trillions daily. This shift in investor sentiment underscores the growing optimism within the crypto community amid potential regulatory changes.
Chris Larsen, co-founder of Ripple Labs, stands to benefit the most from XRP’s rebound, with a substantial portion of his $3.3 billion net worth tied up in the asset. Following the election, his fortune has skyrocketed to approximately $9.2 billion, reflecting a remarkable 278% increase. This surge highlights not only Larsen’s personal gains but also the broader implications of potential pro-cryptocurrency policies under Trump’s administration, fostering hope among investors that XRP could emerge as a favored asset in a new regulatory era.
XRP’s price surge is fueled by the expectation that the recent political shifts will play a pivotal role in the ongoing legal struggles the token has faced, particularly with the SEC. The regulatory agency targeted XRP following a lawsuit in December 2020, claiming Ripple Labs conducted an unregistered securities offering amounting to $1.3 billion. A recent judgment from Judge Analisa Torres declared that Ripple’s private sales to institutional investors violated U.S. securities laws, while retail sales through exchanges were deemed legal. This mixed ruling has created uncertainty, as Ripple and the SEC are currently negotiating penalties for past violations.
The broader regulatory landscape has also changed. While the SEC was under the leadership of Jay Clayton, a Trump appointee, it initiated actions against Ripple. However, Trump’s successor, Gary Gensler, became known for his aggressive stance against the cryptocurrency industry, culminating in several high-profile lawsuits against exchanges. Gensler’s recent resignation has sparked speculation over who will fill the position and what it means for the future of XRP and other digital assets. Many in the crypto space believe that a new appointment may lead to a swift resolution of pending legal matters, potentially giving XRP a clearer regulatory status.
A resolution in favor of Ripple could lead to significant developments, such as the approval of multiple spot exchange-traded funds (ETFs) designed to track XRP’s price. The cryptocurrency landscape has seen substantial traction with Bitcoin and Ethereum, which boast market capitalizations of $1.9 trillion and another billion respectively, and have already launched multiple products tracking their prices. In the weeks before the election, bullish sentiment in the crypto community led to the filing of several spot XRP ETF applications from various firms, positioning XRP for an optimistic future as investors diversify their holdings.
In conclusion, the recent political and regulatory developments present a unique opportunity for XRP to redefine its standing in the cryptocurrency market. The significant price surge reflects confidence among investors in a potentially favorable regulatory climate under Trump’s leadership. While the ongoing legal challenges with the SEC pose immediate hurdles, the lifting of these constraints could enable a broader acceptance of XRP, encouraging institutional investment and paving the way for the introduction of financial products like ETFs. Ripple Labs and its supporters remain cautiously optimistic, recognizing that navigating the regulatory landscape is essential for long-term success and sustainability in the fast-evolving world of cryptocurrencies.
