- XRP’s surge is driven by positive legal news and potential ETF approval.
- ETF approval could boost XRP’s legitimacy, attracting institutional investors.
- Ripple’s network expansion remains a key driver for long-term XRP growth.
The recent surge in the price of XRP, which has nearly quintupled from $0.52 in November 2024 to $2.44, has placed Ripple’s cryptocurrency in the spotlight. XRP has climbed to become the third-largest cryptocurrency, following Bitcoin and Ethereum, with a market capitalization of around $140.3 billion.
This rise outpaced other cryptocurrencies, especially during the market upswing following Donald Trump’s U.S. presidential election win. The key driver behind XRP’s rally has been positive news surrounding Ripple’s ongoing legal battles, with expectations now building for the approval of an XRP ETF.
The Likelihood of ETF Approval and Its Impact
Ripple’s potential ETF approval has gained significant attention. According to Polymarket data, there is a 70% chance that Ripple’s ETF application will be approved this year. Four firms, 21Shares, Bitwise, Canary Capital, and WisdomTree have filed ETF applications with the SEC. The likelihood of approval has increased, especially with Paul Atkins, a crypto-friendly figure, leading the SEC under the Trump administration.
If XRP secures ETF approval, the impact could be profound, drawing institutional investors and facilitating easier retail participation. This would likely lead to an uptick in market legitimacy for XRP and accelerate its ongoing rally. Historical trends support this, as Bitcoin saw a 60% rally in 2021 after the first futures ETF approval and Ethereum saw a 42% rally following its ETF approval in 2024.
Ripple’s Core Business and Future Growth
While the potential approval of an ETF is promising, Ripple’s core business remains a significant factor in XRP’s price movement. Ripple operates a digital payment network that facilitates low-cost, fast international money transfers using XRP. Consequently, if Ripple’s network adoption grows, XRP’s value is likely to rise.
The legal battle with the SEC has been a crucial point of uncertainty, but Ripple’s victory in arguing that XRP is not a security has opened the door for greater acceptance. Even if the SEC case is dismissed or settled in Ripple’s favor, the potential for new partnerships and network expansion will be key drivers for future growth. As Ripple continues to attract new users, XRP’s market position could strengthen even further.
XRP’s Volatility and Market Performance
XRP has shown both strong growth and significant volatility in recent years. In 2021, XRP posted a remarkable 278% return, followed by a 59% decline in 2022. However, 2023 and 2024 saw positive returns of 81% and 233%, respectively.
This volatility has raised questions about XRP’s ability to consistently outperform broader markets. In contrast, the S&P 500 index posted relatively steady returns, suggesting that while XRP may outperform during rallies, its risk factor remains higher.
