As a seasoned crypto investor with a knack for spotting trends and a portfolio that has weathered numerous market cycles, I must admit, the recent flip of Tether’s USDt by XRP to claim the third spot on the cryptocurrency market cap rankings has piqued my interest.
I’ve been around long enough to remember when XRP was a contender for the top spot, and seeing it regain some of its lost ground is a welcome sight. The surge in XRP’s market cap, driven by a combination of factors including broader market sentiment, ETF speculation, and the launch of Ripple USD stablecoin, is certainly something to keep an eye on.
That said, I’m not one to jump on bandwagons without doing my due diligence. Tether remains the dominant player in the stablecoin market, and despite its recent dip, it’s still a force to be reckoned with. The growth in USDT user base and activity, especially on Tron, is a testament to its resilience.
As for XRP, I’m cautiously optimistic. Its outsized price performance is promising, but there are always risks involved in investing in any asset, especially in the volatile world of cryptocurrencies. But hey, if it turns out that XRP does indeed become a major player again, I might just have to invest a little more in my favorite coffee-loving digital asset!
And on a lighter note, who would’ve thought that one day we’d be discussing the market cap of digital assets over our morning coffee? It’s enough to make me wonder if the next step will be smart coffee mugs with built-in blockchains!
Previously, Tether’s USDt stablecoin held the third position in terms of market capitalization among all cryptocurrencies, with Bitcoin and Ethereum ahead. However, XRP has recently surpassed USDt to take over the third spot, with Bitcoin and Ethereum still leading the way.
On January 3rd, the market value of XRP (XRP) reached an impressive $138.98 billion, outpacing USDt (USDT), which experienced a decrease in market cap amounting to $1.6 billion since December 30th. This shift occurred simultaneously with the initiation of the European Union’s Markets in Crypto-Assets Regulation (MiCA).
Currently, XRP is being exchanged for approximately $2.43, representing a 17% increase over the past fortnight, as reported by CoinGecko. Over the course of the last year, XRP has experienced a substantial surge of nearly 280%.
The dip in USDT’s market dominance can be attributed to the implementation of the MiCA framework, which imposes tighter regulations on stablecoin issuers. These rules mandate that stablecoin issuers keep sufficient reserves and secure licenses for operations within the European Union.
On December 13th, Coinbase Europe removed Tether (USDT) from their platform due to non-compliance with MiCA regulations. It’s important to note that Coinbase and Circle collaborated to introduce USD Coin (USDC) in 2018, and Coinbase owns a portion of Circle’s equity. In March 2023, the value of USDC fell below its intended parity with the US dollar following the collapse of Silicon Valley Bank.
European regulators have yet to confirm whether USDT fully complies with the MiCA regulations.
XRP gains momentum amid ETF speculation
On December 1st, it wasn’t the initial occasion that XRP surpassed USDT in terms of market capitalization. In fact, on that same day, XRP also overtook Solana (SOL) and USDT in the ranking of market caps.
The surge in the value of XRP started following Donald Trump’s win in the U.S. presidential election on November 5th. This upward trend was fueled by optimism about crypto-friendly policies that were anticipated from the new government.
The talk about a potential XRP exchange-traded fund (ETF) has further boosted XRP’s progress. On December 2nd, WisdomTree submitted an application to the U.S. Securities and Exchange Commission for a direct XRP ETF, joining forces with Bitwise, Canary Capital, and 21Shares in this endeavor.
Bitwise and 21Shares were also among the first issuers of spot Bitcoin (BTC) ETFs in January 2024.
As an analyst, I find it intriguing to note that the significant surge in XRP’s price could be linked to Ripple Labs’ recent launch of Ripple USD (RLUSD), a stablecoin pegged to the US dollar, on December 17th. This innovative stablecoin is slated for integration into Ripple Payments by early 2025, aiming to streamline cross-border transactions for our enterprise clients.
RLUSD has already amassed a market cap of $72 million, according to CoinGecko.
Tether remains the dominant stablecoin
Despite the dip, Tether continues to dominate the stablecoin market.
Currently, Tether (USDT) holds about 67.21% of the total $204 billion stablecoin market as per DefiLlama’s data. In comparison, Coinbase’s US Dollar Coin (USDC), the second-largest stablecoin, has a market capitalization of approximately $44 billion.
Despite lingering apprehension, ambiguity, and skepticism, also known as FUD, the number of users for USDT expanded by 11.7% in December, bringing on board an additional 21.9 million users, up from 19.6 million in November. On the other hand, USDC experienced a surge of 24%, with 5.7 million new addresses created last month, compared to 4.57 million the month prior.
A significant majority of Tether (USDT) transactions occur on the Tron network, making up about 53.8% of all USDT addresses. In contrast, USD Coin (USDC) attracts the most attention on Solana, where approximately 30% of its users are located, with Ethereum Layer 2 (Base) hosting around 6.5%.
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2025-01-03 16:56