Today, the market cap of the public chain Ripple ($XRP) has jumped to become the third-largest cryptocurrency, surpassing USDT and SOL, increasing nearly fourfold in the past month. What favorable factors are driving this?
Recently, the cryptocurrency market has welcomed multiple favorable developments, and Ripple (XRP), as an established public chain, has become the focal point of the market. The news of SEC Chair Gary Gensler's impending resignation has ignited market expectations for a more favorable regulatory environment.
Meanwhile, Ripple's long-standing legal dispute with the SEC is expected to reach a resolution, with court rulings repeatedly sending positive signals for Ripple, clearing some developmental obstacles for XRP. This series of favorable developments has propelled XRP’s price to a strong rebound, surging over 250% in just a month, with daily increases exceeding 35%, reaching a nearly three-year high, reigniting investor enthusiasm.
As one of the pioneers in the blockchain field, XRP has focused on cross-border payment scenarios since its launch in 2012, gaining favor among financial institutions for its efficiency, low cost, and technological innovation.
However, the growth path of this classic token has not been smooth, facing pressures from market competition and frequent setbacks due to regulatory controversies. Now, amidst a gradually shifting regulatory environment and a boost in market confidence, XRP seems to be seizing this historic opportunity to redefine its future market positioning. As a veteran in the cryptocurrency field, will XRP once again open up innovative paths and lead the future of blockchain payments? Let's explore.
01. Regulatory favorable developments push the revenge concept coin XRP to a three-year high
In the aftermath of the 2024 U.S. presidential election, Republican candidate Donald Trump was elected as the next president with a high vote count. During the campaign, Trump promised to make the U.S. the 'global cryptocurrency capital' and strongly support the crypto industry, which undoubtedly brought a significant boost in confidence to the market, driving up the prices of several cryptocurrencies, including XRP. In this wave of market recovery, XRP, dubbed the 'revenge concept coin', experienced a turnaround, reaching a three-year high and becoming the focus of investor attention. However, the rise of XRP is not solely due to Trump’s campaign promises, but also stems from a series of changes in the regulatory environment, as well as key developments in Ripple's four-year difficult lawsuit with the SEC.
Regulatory changes bring catalysts to the market
Since the end of 2020, Ripple has been sued by the SEC for allegedly raising funds through unregistered securities, facing four years of regulatory pressure regarding XRP. The SEC accused Ripple of issuing XRP since 2013, raising $1.3 billion, and claimed its actions violated securities laws. This lawsuit not only led to a significant drop in XRP's price but also forced several exchanges to suspend XRP trading, severely impacting market confidence.
However, as the legal disputes gradually come to a close in 2024, XRP has welcomed a long-awaited turnaround. In 2023 and 2024, U.S. Federal Judge Analisa Torres made rulings that brought significant breakthroughs for Ripple. She determined that Ripple's sale of XRP to retail investors did not violate securities laws, while sales to institutional investors were ruled illegal, resulting in a $125 million fine for Ripple. This ruling is significantly lower than the SEC's initial demand for a $2 billion fine and allows for future operational space for Ripple. More importantly, this ruling has released signals about the future development of XRP in the market, alleviating excessive regulatory concerns.
The new SEC Chair may bring more favorable developments for XRP.
Another important factor driving the recovery of XRP is the news of SEC Chair Gary Gensler's resignation. Gensler is one of the most controversial regulators in the cryptocurrency industry in recent years, and his strict regulatory policies have once trapped many crypto projects in difficulties. However, with Gensler set to step down in January 2025, market expectations for the new SEC Chair have risen significantly. Many anticipate that the new SEC leadership may adopt a more lenient and friendly attitude towards the cryptocurrency industry, bringing hope to XRP and other projects that have faced regulatory pressure.
(The Washington Post) reports that Trump's advisory team is evaluating several candidates for SEC Chair, including officials and financial executives who have publicly supported cryptocurrencies. The market generally believes that these candidates may adopt a more favorable stance on cryptocurrency regulatory policies. If the new SEC Chair truly shifts policy as expected, Ripple's litigation may welcome resolution or even dismissal, fundamentally changing the regulatory environment for the entire cryptocurrency industry. This would undoubtedly be a significant policy advantage for previously suppressed projects like Ripple, Binance, and Coinbase.
Ripple changes litigation predicament through political action
Ripple's 'revenge path' relies not only on legal and regulatory changes but also on its active involvement in the political arena as part of its strategy. According to CoinDesk reports, Ripple Labs has injected $25 million into the Fairshake Political Action Committee (PAC) in the cryptocurrency industry, aiming to influence the 2026 U.S. congressional elections and promote more favorable cryptocurrency regulatory policies. This move marks the company's beginning to leverage political means, attempting to reverse its litigation predicament with the SEC through policy reform, and secure a more favorable legal and regulatory environment for XRP.
Additionally, Reuters reports that several cryptocurrency companies, including Ripple (such as Circle, Kraken, Coinbase, a16z, and Paradigm), are competing for positions on the cryptocurrency advisory committee planned by Trump. This committee will become an important platform for cryptocurrency policy reform, and companies involved will have the opportunity to directly influence future policy directions, especially under the cryptocurrency-friendly policy framework promoted by the Trump administration. If Ripple can secure a seat in this process, it will be able to gain more support for XRP at the policy level, thereby gaining more freedom in future regulatory environments.
02. XRP: Innovator of traditional financial payment systems
In recent decades, the global financial payment system has been dominated by traditional banking settlement and payment methods. Although these systems have certain advantages in terms of stability and security, with the deepening of globalization and rapid development of e-commerce, traditional financial payment systems have exposed a series of pain points that need urgent resolution.
High transaction costs, inefficient payment processing speeds, and the complexity and high costs of cross-border payments have become bottlenecks hindering global financial liquidity and market development. To address these issues, Ripple introduced XRP and the XRP Ledger, rapidly emerging as an important force in driving innovation in traditional financial payment systems due to its innovative technological architecture and unique business model.
What is XRP and Ripple?
XRP is the native cryptocurrency of the Ripple network and is one of the core technologies designed by Ripple to address pain points in the global payment system. Unlike traditional payment methods such as bank transfers and SWIFT, XRP provides a new solution for global payments through blockchain technology.
Ripple has significantly improved transaction speed and reduced costs through its innovative Ripple Protocol Consensus Algorithm (RPCA) and decentralized XRP Ledger, providing the ability to bridge different currencies and enabling payments that cross borders. Essentially, XRP acts as a bridging currency, facilitating efficient and low-cost exchanges between different fiat currencies, offering a smoother path for global payments and cross-border settlements.
Ripple, a technology company dedicated to promoting financial system innovation, was founded in 2012 by Chris Larsen and Jed McCaleb. Ripple's initial goal was to transform existing financial payment systems through blockchain technology, especially to address the high costs and inefficiencies in traditional banking settlement systems.
Ripple's vision is not only to establish a new cryptocurrency but, more importantly, to create a decentralized and global financial network that connects banks, payment service providers, and financial institutions around the world through RippleNet, achieving faster, cheaper, and more efficient payments and transactions.
XRP's technical advantages: efficiency, low cost, and high throughput
One of XRP's greatest advantages lies in the XRP Ledger (XRPL) technology architecture it employs. Unlike traditional blockchain projects such as Bitcoin and Ethereum, XRP uses a unique consensus mechanism known as the Ripple Protocol Consensus Algorithm (RPCA).
This algorithm does not rely on traditional proof-of-work (PoW) or proof-of-stake (PoS) mechanisms, but achieves consensus through a set of independent validating nodes, ensuring the validity of transactions. This design allows the XRP network to complete transaction validation in seconds, and transaction fees are relatively low, usually only 0.00001 XRP, greatly reducing the high transaction fees and time delays commonly seen in traditional financial payments.
Compared to Bitcoin's transaction processing speed of only 7 transactions per second, the XRP Ledger can handle up to 1500 transactions per second, and with continuous technological optimization, future throughput is expected to further increase.
This efficient transaction processing capability makes XRP an ideal choice for cross-border payments and fund transfers, especially in scenarios requiring quick settlements and large payments, where XRP demonstrates unparalleled advantages.
The role of XRP in the global payment system: an innovation in cross-border payments
One of XRP's core advantages is its ability to provide efficient and low-cost payment solutions across different countries and regions, particularly in the field of cross-border payments. Traditional cross-border payments often rely on multiple intermediary banks and complex settlement processes, which not only increase the time costs of transactions but also make payment fees exorbitant.
According to data from the Society for Worldwide Interbank Financial Telecommunication (SWIFT), traditional cross-border payments typically take 2 to 3 business days, and transaction fees usually range from 5% to 10% of the payment amount. This inefficient and costly payment method has become a bottleneck in global financial transactions and commercial activities.
Through its innovative On-Demand Liquidity (ODL) technology, XRP has completely changed this situation. ODL technology allows users to make instant cross-border payments using XRP as a bridging currency without pre-funding. For instance, when a company wants to transfer funds from the U.S. to Japan, traditional methods require reliance on multiple intermediary banks and may take days to complete the transaction.
Through XRP, users can complete payments in seconds at a cost far lower than traditional payment methods. This efficient, convenient, and low-cost payment method greatly enhances the efficiency of global trade and capital flow.
Ripple has gradually established a wide payment network globally through collaborations with numerous banks, payment service providers, and financial institutions. This allows XRP to not only play an important role in traditional finance but also achieve breakthroughs in payment and remittance in emerging markets and developing countries, further promoting financial inclusion.
The advantages of Ripple and XRP: a combination of bank cooperation and decentralization
XRP's success in the global payment system is largely due to its deep collaboration with traditional banks and financial institutions. Ripple has always adhered to the philosophy of 'collaborating with traditional financial institutions rather than competing with them', establishing partnerships with leading financial institutions globally, allowing XRP to be rapidly promoted within existing financial infrastructures. For example, Ripple has engaged in strategic partnerships with several large banks and payment platforms, such as Bank of America, Credit Suisse, and MUFG, to promote the application of XRP in cross-border payments and settlements.
These partnerships not only enhance XRP's market recognition but also lay a solid foundation for its further expansion into the financial services sector.
However, the integration of XRP with the traditional banking system does not mean it loses its decentralized characteristics. The XRP Ledger is a decentralized public blockchain that anyone can join and become a validating node. This means that even if Ripple no longer exists, the XRP network can continue to operate. The decentralized design ensures that XRP is not controlled by a single entity, which is a key advantage distinguishing it from traditional financial systems.
In the future, XRP may not be limited to cross-border payments; its application potential in emerging fields such as decentralized finance (DeFi) and asset tokenization is also promising. As Ripple continues to strengthen its collaboration with global banks and financial institutions, and promotes the adoption of XRP in more financial domains, XRP is expected to become an indispensable part of the global payment system, evolving into a new global currency.
03. From traditional finance to the Web3 industry: Ripple's long-term layout and the future of XRP
Although Ripple is a blockchain company, its past focus has primarily been on the traditional financial sector. With the rapid development of global fintech, the transition from traditional finance to the Web3 industry has become the mainstream trend in the financial market, and Ripple is gradually laying out its position in the Web3 industry.
However, unlike many cryptocurrency projects, Ripple has not limited its vision to merely the digital currency sector, but is advancing the diversification of its products and services from a broader perspective. Ripple focuses on areas such as decentralized finance (DeFi), stablecoins, and asset tokenization in the Web3 space. Notably, while XRP itself does not have a direct role in these strategic directions of Ripple, this long-term layout of Ripple has given XRP a broader application prospect for the future.
Ripple's robust strategy: compliance-based expansion into Web3 partnerships
Unlike many cryptocurrency projects that are short-sighted and speculative, Ripple has always adhered to a solid core strategy, committed to promoting innovation within a compliant framework. Throughout the four-year litigation with the SEC, Ripple's strategic direction has become increasingly clear, further strengthening its philosophy of steady development. From initially positioning XRP as a cross-border payment tool to actively laying out Web3 today, Ripple has always maintained compliance and closely cooperated with traditional financial institutions. This strategy not only enhances market trust in Ripple but also makes its layout in the Web3 sector more forward-looking and sustainable.
In terms of compliance, Ripple has achieved significant accomplishments. The company and its subsidiaries hold nearly 40 U.S. money transmission licenses, New York BitLicense, a major payment institution license from the Monetary Authority of Singapore, and registration as a virtual asset service provider (VASP) with the Central Bank of Ireland, ensuring its legal operations in multiple countries and regions. These qualifications provide Ripple with strong compliance support and further enhance its credibility as a global financial service provider.
Ripple's global network partnerships also provide strong support for its expansion in the Web3 field. The company has established deep collaborations with over 100 banks and financial institutions worldwide, including well-known entities like Santander Bank and MUFG, enhancing Ripple's influence in the traditional financial sector and providing more practical application scenarios for XRP.
Additionally, Ripple is actively promoting the tokenization of real-world assets (RWA) in collaboration with platforms such as Archax, helping traditional financial assets smoothly enter the blockchain ecosystem. At the same time, Ripple is also laying out plans in the 'institutional-level DeFi' sector, creating new opportunities for further cooperation with financial institutions through partnerships with platforms such as OpenEden, investing in tokenized government bonds and other projects. Recently, proposals for an XRP ETF submitted by companies such as Bitwise Asset Management have sparked widespread market attention towards Ripple's future potential, further validating its strategic advantages in merging Web3 and traditional finance.
XRP and Web3: Challenges and opportunities in adaptation and transformation
Although Ripple has gradually shifted its strategic focus from traditional cross-border payments to the Web3 field, this does not mean that the XRP token can adapt to this transformation without obstacles. Unlike the traditional cross-border payment market, the core values of the Web3 industry lie in decentralization, liquidity of digital assets, and the application of smart contracts. These characteristics make XRP's role in Web3 distinctly different from its role as a bridging currency in cross-border payments. Despite the recognition of XRP's technological advantages and efficient transaction mechanisms, it faces a significant challenge in the Web3 ecosystem: how to closely align with the demands of emerging fields such as decentralized finance (DeFi). To find a new positioning in this emerging field, Ripple must further promote the deep integration of XRP with Web3.
Ripple is expanding the application scenarios of XRP through multiple initiatives, gradually penetrating other key technology areas in the Web3 industry. According to information from BlockBeats, on November 30, FOX Business cited sources saying that the New York Department of Financial Services indicated to Ripple that it would approve the launch of its new stablecoin product—RLUSD, with a planned official launch on December 4. In the future, the RLUSD stablecoin will serve as a supplementary tool for XRP, enhancing its role in Ripple's payment solutions. This strategy not only helps solidify XRP's market position in the payment sector but also opens new opportunities for its application in Web3. Additionally, Ripple is actively promoting the construction of the XRPL ecosystem by funding developers and supporting innovative applications in the global Web3 field. Through these initiatives, Ripple is using XRP as a foundation to actively promote the development of Web3 technology, providing innovative solutions for emerging fields such as decentralized finance (DeFi).
What is the future prospect of XRP?
After Trump's election, the cryptocurrency industry holds an optimistic view of future regulatory policies, bringing new opportunities for the traditional financial industry, which has long sought to enter the crypto market. As Ripple has long been entrenched in the traditional finance sector, its potential and influence in cross-border payments have attracted significant investor attention. The recent price trend of XRP also reflects this trend, as XRP recently broke through a dynamic resistance level that had stood for 5 years.
Some optimistic crypto analysts believe that XRP's next target price could reach $4.20, driven by market sentiment and favorable policies, with XRP expected to break through the historical high of $3.317 set in 2018 in the short term.
However, the future of XRP still presents considerable controversy. On one hand, the new SEC Chair has yet to be confirmed, leaving Ripple with some regulatory uncertainty and potential compliance risks.
On the other hand, since the launch of XRP in 2012, its performance has not been as outstanding as expected. Although Ripple announced plans to use XRP for cross-border payments, there is little indication that XRP is achieving the frequency of actual use in global financial services that meets expectations. Moreover, Ripple has not publicly disclosed the profitability of its cross-border payment business, relying more on the sale of XRP tokens to sustain operations, leading to substantial benefits for its founding team and shareholders. Notably, the vast majority of XRP tokens remain held by Ripple, and the company sells a certain amount of XRP every quarter.
Furthermore, XRP's past performance has not significantly changed public perception of its potential in the Web3 field, leading some investors to question its future market role. However, Ripple has clearly recognized this challenge and is taking proactive measures to enhance XRP's future development potential. Recently, Ripple launched the RLUSD stablecoin, expanding the XRPL ecosystem, and some institutions, such as Bitwise Asset Management, have submitted XRP ETF proposals. These initiatives indicate that XRP remains a key component of Ripple's future development. Despite facing challenges, the future of XRP is still promising.
