The 'God Candle' event of XRP/SOL (i.e., the sudden price surge) occurred simultaneously with incidents of human exploitation, human trafficking, and attempted suicides during a live stream on Pump.fun. These events prompted reflection: when a protocol has a large user base but lacks oversight mechanisms, it can lead to extremely negative consequences, including the proliferation of illegal activities and the exacerbation of social issues. This situation will ultimately attract the attention of regulatory agencies or law enforcement.
This leads to another controversial feature of XRP: Trust Lines. Trust Lines require users to actively establish a trust relationship before receiving a certain token. This means users cannot arbitrarily send 'racist tokens' or other unwanted tokens to any address. While this design has been criticized as a 'high-friction' user experience (UX), it effectively prevents low-quality use while catering to high-quality users (such as banks). As the market gradually recognizes the issues that may arise without these safeguards, this mechanism is increasingly accepted.
Bitcoin (BTC) has almost no application in such scenarios, but its performance still far exceeds that of Ethereum (ETH), even though the latter claims to be able to 'drive Web3'. This is the initial stage of market change, but the live event with SOL allowed people to truly understand what 'mass adoption beyond purchase' looks like and realize the importance of compliance.
Another significant change is that since Trump's election, the aggressive enforcement regime has effectively ended. This has transformed U.S.-based protocols from facing existential risks to being in a 'protected' status. Any attempts to scrutinize Ripple Labs could face strong resistance from the U.S. government.
The biggest risk XRP once faced was the possibility that the U.S. government could charge its Unique Node List (UNL) with money transmission and impose OFAC fines, while letting the SEC sue each validator to force compliance. However, with changes in the regulatory environment, these risks have gradually transformed into advantages for XRP.
Protocols with similar risks (such as Cardano and XLM) have thus taken more proactive actions. Nowadays, the regulatory environment in the United States views it as an important tool against censorship.
Moreover, the unique position of the United States in the global financial system has also influenced this trend. The U.S. is one of the centers for anonymous cash globally, as other countries find it difficult to enforce reporting requirements on U.S. financial institutions. Tether can be seen as an on-chain extension of this logic—a semi-compliant cash reserve pool worth up to $135 billion. As long as these assets are denominated in dollars, the U.S. government does not care about reporting requirements from other countries. This is also the reason behind Tether's shutdown of operations in Europe.
The United States aims to strengthen the global dominance of the dollar through financial innovations in the cryptocurrency space. As a result, XRP's development activities have shifted from 'marginalization' to being part of U.S. government policy.
Although recent price fluctuations of XRP have been partially attributed to retail-driven movements, in reality, especially for long-established cryptocurrencies, the concentration of holdings is quite high. Most whales in the network are not selling at the current price, even though market liquidity fully allows them to do so. This indicates that they still have confidence in the future of XRP, and this confidence stems from the multiple factors mentioned above.
