XRP surpasses Solana and Tether to become world's third-largest cryptocurrency

In a $100 billion rally, XRP, a token associated with Ripple Labs Inc., has surpassed its competitors to become the third-largest cryptocurrency.

The token surged by as much as 32% on Dec 2, reaching $2.87. During this rise, its market capitalization exceeded $154.6 billion, a significant increase from under $30 billion on Nov 5, when Donald Trump won the US presidential election, based on CoinGecko data.

According to Edward Chin, co-founder of Parataxis Capital, the most recent price increase was caused by short liquidations on futures exchanges and ongoing foreign purchases, mostly in South Korea.

In the last 24 hours, short positions in XRP totaled almost $60 million, which was more than the total amount of short positions in Bitcoin and Ether.

“The move seems to be entirely retail driven, as nothing has fundamentally changed for XRP itself,” Chin said.

“The move looks to be excessive given XRP is now a top-three digital asset, but that doesn’t mean that it can’t continue given the reflexivity in this market,” it added.

With the anticipated Trump administration expected to deliver on its promises to create a favorable environment for digital asset companies in the US, the latest price surge builds on the momentum from his election victory, which sparked a wave of speculative optimism in the crypto market.

Despite this, XRP's growth stands out: according to CoinGecko data, its market capitalization has recently surpassed that of rivals Solana and Tether's USDT stablecoin.

The US Securities and Exchange Commission filed a lawsuit against Ripple Labs in 2020, alleging that the San Francisco-based business violated the law by raising funds by selling XRP without registering it as a security.

Later, the agency, led by Chair Gary Gensler, filed litigation against a number of digital asset companies, such as Binance Holdings Ltd. and Coinbase Global Inc.

Trump had promised to dismiss Gensler throughout the campaign, and he now plans to resign in January, the day the president-elect is scheduled to take office.

Trump also promised to place benevolent regulators and support the establishment of a strategic Bitcoin reserve in the United States.

According to CoinGecko data, the market value of cryptocurrencies has increased by almost $1.2 trillion since Trump's election victory.

Bitcoin, the market leader, was trading at $95,760 last month after briefly approaching $100,000 for the first time. The second-largest cryptocurrency, ether, was exchanged for $3,613.