Written by: JiaYi
Recently, XRP experienced a remarkable surge, skyrocketing from a month ago's low of $0.48 to a high of $2.9, an increase of over five times. Is there a deeper market reason behind this surge?
The 'behind-the-scenes' of XRP's surge
As a strong coin closely related to regulation, XRP has always been seen as a barometer of U.S. Crypto regulation. Since the long-term lawsuit between Ripple Labs and the U.S. Securities and Exchange Commission (SEC) erupted, XRP's performance has been closely tied to the dynamics of U.S. regulatory policies.
Favorable progress in the SEC lawsuit: There has been new progress in the long-term lawsuit between the SEC and Ripple Labs, as the court ruled that XRP does not constitute a security in certain transactions, significantly boosting market confidence.
Potential regulatory support: New York state regulators may approve Ripple Labs' stablecoin RLUSD, providing new space and possibilities for Ripple's future development.
Technological and infrastructure upgrades: Ripple's continuous technical optimization, especially improvements in Ripple Ledger (XRPL), along with potential participation from U.S. institutions, enhances the foundational value of XRP.
Market recovery: The overall warming of the cryptocurrency market creates favorable conditions for XRP's rise.
It is worth mentioning that XRP's 24-hour spot trading volume once surpassed BTC, and in the top five exchanges, South Korea's Upbit and Bithumb exchanges also played significant roles.
The 'seer' prediction from eight months ago: Was XRP's surge destined?
This phenomenon makes me reminisce about a prophetic video I had once deemed 'mystical' eight months ago. This video not only accurately predicted the surge of XRP but also had many other striking predictions that came true, such as accurately foreseeing Trump's assassination attempt (including details of ear injuries and ballistic trajectory). Two points sound rather 'chilling':
After Trump's re-election, the U.S. will face a severe economic crisis similar to the Great Depression of 1929, followed by a gradual recovery.
In the coming period, the dollar may collapse, while digital currencies (but seemingly not Bitcoin) and gold will surge.
We all know that the dollar has long dominated the global economy. The dollar's status stems from various factors, including its role as an international settlement currency, the stability of the American political and economic system, and its role as a global safe-haven asset.
However, the current dollar system is facing increasing challenges, including soaring debt, accelerated de-dollarization, and the Trump administration's response measures, all indicating that the dollar system may be heading towards crisis.
Soaring debt: The U.S. federal debt has reached $34 trillion, with daily interest payments alone amounting to $2.4 billion. Over the next decade, debt interest payments will exceed $12.9 trillion, equivalent to twice Switzerland's GDP.
Accelerated de-dollarization: Economies like China, Russia, and the EU are accelerating efforts to de-dollarize and signing agreements to reduce reliance on the dollar. Particularly between China and Russia, energy trade has completely detached from the dollar system, and this trend is spreading globally.
Massive fiscal spending: Therefore, the Trump administration proposed reducing fiscal expenditure by establishing a 'Department of Government Efficiency,' with Elon Musk appointed as the head of that department.
Global economic recession pressures: The high-interest-rate environment has increased the debt costs for businesses and households, and signs of weakness in the U.S. economy are evident, with a slowdown in non-farm employment growth and rising unemployment rates.
New variables for Crypto amid a dollar crisis
If the dollar system truly faces collapse, it could cause a significant shock to the global financial system. How would this situation affect the cryptocurrency market?
Although the following analysis is merely a personal opinion and does not constitute investment advice, we can still glimpse some potential opportunities and risks.
Negative impacts:
Stablecoin collapse: The major stablecoins in the current market, such as USDT and USDC, are dollar-based. If a dollar crisis erupts, the anchoring mechanism of these stablecoins may fail, leading to a dramatic plunge in their value, making the 'stablecoins' in users' hands worthless.
Market turbulence: A dollar crisis could cause severe fluctuations in global capital markets, and the cryptocurrency market would also be affected. In the short term, panic selling may exacerbate market instability.
Potential opportunities:
Bitcoin's ascension: During turmoil in the global financial system, Bitcoin could become a safe-haven asset for investors as 'digital gold.' Countries like Turkey and Argentina have already proven that Bitcoin can serve as a value-preserving tool when their own currencies collapse.
The rise of DeFi: The collapse of the dollar system may prompt more people to turn to decentralized finance (DeFi). Compared to the inefficiencies of traditional financial systems, DeFi offers more efficient and convenient solutions for remittances, lending, and other areas.
It's just that the dollar belongs to the world's largest 'Too Big To Fail' system, so although everyone jokes every year that the dollar's credit system will collapse sooner or later, no one really believes this will happen in their lifetime. However, for investors, especially for those of us who have a significant portion of our wealth in extremely liquidity-sensitive assets like Crypto, we cannot ignore even the slightest possibility.
Whether it's cross-border payment cryptocurrencies like XRP or other Crypto assets, they may provide alternative solutions during turmoil within the dollar system. In certain situations, assets like XRP, which are deeply tied to the traditional financial system, could become 'bridge assets' and further drive up its price.
For investors, this potential trend is not just a risk but also an opportunity.
