XRP has surged past Tether’s USDt stablecoin to reclaim its position as the third-largest cryptocurrency by market capitalization, following only Bitcoin and Ether. On January 3, XRP’s market cap swelled to $138.98 billion, surpassing the diminishing market cap of USDt, which fell by $1.6 billion since December 30. This shift coincided with the European Union’s introduction of the Markets in Crypto-Assets Regulation (MiCA), imposing stringent requirements on stablecoin issuers like maintaining full reserves and securing operational licenses within the EU.
Currently trading at $2.43, XRP has experienced a 17% increase over the past 14 days, with a year-long growth reaching nearly 280%. Contributing to USDT’s decline, Coinbase Europe delisted the stablecoin due to MiCA noncompliance, favoring its own USD Coin (USDC) issued with Circle. USDC faced its challenges earlier this year, notably slipping below its $1 peg after the collapse of Silicon Valley Bank.
XRP has previously bypassed USDt in market rankings, notably on December 1. The recent rally gained traction following Donald Trump’s presidential election win on November 5, which ignited market optimism for potential pro-crypto policies. The anticipation surrounding a potential spot XRP exchange-traded fund (ETF) further fueled this momentum. On December 2, WisdomTree became the fourth entity to apply for an XRP spot ETF with the US Securities and Exchange Commission, alongside Bitwise, Canary Capital, and 21Shares, already known for their spot Bitcoin ETFs launched in early 2024.
Ripple Labs’ introduction of Ripple USD (RLUSD), a dollar-backed stablecoin set to be incorporated into Ripple Payments by 2025, further bolsters XRP’s market position. RLUSD has already achieved a market cap of $72 million.
Despite the fluctuations, Tether remains predominant in the stablecoin market, holding a 67.21% share of the $204 billion market. In December, the USDT user base expanded by 11.7%, adding 21.9 million new addresses, illustrating persistent user growth despite regulatory challenges. Most of the activity for USDT persists on Tron, while USDC sees more adoption on Solana and Ethereum’s Base layer 2.
