The sudden and unexpected prompts the question: Why Ripple and why now?
Ripple (XRP-USD) gained 23% late Monday and early Tuesday against the U.S. dollar, continuing a rally over the past month that has added over 400% to the token’s relative value.
With that, Ripple took the number-three spot in terms of cryptocurrencies by market capitalization, overtaking Tether (USDT-USD) and now only trailing Bitcoin (BTC-USD) and Ethereum (ETH-USD).
Ripple, known as a cryptocurrency that facilitates cross-border transactions and is favored by some banks, surged 450% during the past month. Having traded at around $0.50 a month ago, Ripple currently trades at around $2.78 after a 20% spike over the past 24 hours.
The price surge of the past 24 hours doesn’t seem to have a specific catalyst, and is likely just a continuation of optimistic sentiment based on deregulation hope.
President-elect Donald Trump is known for his pro-cryptocurrency stance, and he is expected to replace outgoing Securities and Exchange Commission (SEC) Chairman Gary Gensler with a more crypto-friendly SEC head.
Gensler’s SEC previously pursued legal action against Ripple because the regulatory agency considered the token an unregistered security. Cryptocurrency traders are generally hopeful that Gensler’s successor will provide a more accommodating regulatory environment for cryptocurrencies such as Ripple.
Analysis: Ripple may get its own stablecoin
Traders may also be enthused about the prospect of Ripple getting its own stablecoin. In late November, the New York Department of Financial Services (NYDFS) indicated that it was prepared to approve a new stablecoin for Ripple.
Pending the likely NYDFS approval, Ripple hopes to launch the stablecoin, called RLUSD, to the public on December 4.
As the name implies, stablecoins tend to be more stable since they’re typically pegged to a currency such as the U.S. dollar. Thus, upon approval, RLUSD could provide a less volatile alternative to Ripple.
Evidently, Ripple bulls anticipate an easing of regulations in New York and at the federal level in the coming weeks and months. December is still just getting underway, so only time will tell whether Ripple ends 2024 on a strong note after a November to remember.
