(Bloomberg) -- After being at the center of a conflict with the US Securities and Exchange Commission for years, XRP now has the largest gains of any major cryptocurrency so far this year.
The token linked to Ripple Labs Inc. reached a record high of $3.40 on Thursday and is up over 60% so far this year as expectations of a more crypto-friendly Trump administration and SEC help raise the outlook for the third-biggest cryptocurrency by market value. That has “XRP Army” trending on X, as the token’s long-time community of supporters celebrate the increase.
San Francisco-based Ripple Labs was sued in 2020 by the SEC, which claimed the company was offering unregistered securities. A US district court later found that XRP was a security when sold to institutional investors but not when sold to retail investors, which was seen as a win in the crypto industry. The SEC is appealing the ruling, but with a pro-crypto SEC chair set to come in, the future of that appeal could be in doubt.
“There is a lot of optimism that Ripple can focus on XRP adoption and utility if this case is resolved under the new Trump administration SEC,” said Strahinja Savic, head of data and analytics at FRNT Financial Inc. “This optimism is additionally buoyed by the ‘XRP Army,’ the fervent and highly loyal social media-based community that is highly supportive of the asset.”
Ripple Chief Executive Officer Brad Garlinghouse said in a January post on X that there is optimism for the crypto market under the incoming administration, highlighting Donald Trump’s appointments for crypto czar and SEC chair. “The ‘Trump effect’ is already making crypto great again,” he wrote.
A more friendly SEC could also open the door to more crypto exchange-traded funds being approved. Garlinghouse told Bloomberg Television in October that it’s “just inevitable” that there will be an XRP ETF as institutional interest in crypto grows.
Many in the crypto industry are also hopeful that Trump’s incoming administration will establish a strategic Bitcoin reserve, with the US holding tokens it seizes and purchasing additional tokens. The New York Post reported on Thursday, that Trump is also receptive to the idea of including US-based tokens like XRP, Solana and USDC in the reserve, without naming sources of the information.
XRP started in 2012 and was intended to be used for low-cost foreign exchange transactions. In December last year, Ripple also launched stablecoin RLUSD on the XRP Ledger and Ethereum blockchains.
“This move has strengthened Ripple’s position in the financial sector and increased demand for XRP, particularly in light of its partnerships with major banks and payment systems, as well as the new MiCA regulation, which requires European exchanges to delist the USDT stablecoin,” said Bitget CEO Gracy Chen.
While XRP now has an over $190 billion market capitalization, the token trades around $3.37, significantly below Bitcoin’s near $100,000 and Ethereum’s around $3,300.
Alternative cryptocurrencies like XRP also tend to be more volatile than Bitcoin. XRP has seen four consecutive days of gains, but saw three weeks of declines in December. But that hasn’t deterred investors, as its market capitalization has more than doubled since the November election.
“There are a lot of ardent ‘HODLers’ who believe the asset will play a crucial role in global finance in the future and are ready to stomach what they believe is short-term volatility,” Savic said.
