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XRP has recently reclaimed its position as the third-largest cryptocurrency by market capitalization, surpassing Tether (USDT), which now holds the fourth spot. XRP’s market cap is nearing the $140 billion mark, while Tether’s market cap stands at around $137 billion. This shift comes after a significant surge in XRP’s value, which has increased by nearly 15% in the past seven days and an impressive 350% over the past year.
This rally in XRP’s price is largely attributed to several factors. One of the main drivers is the recent launch of Ripple Labs’ US dollar-backed stablecoin, Ripple USD (RLUSD), in December 2024. Additionally, there is growing speculation that the U.S. Securities and Exchange Commission (SEC), now under the leadership of pro-crypto chairman Paul Atkins, may soon approve an XRP exchange-traded fund (ETF). This has fueled optimism among investors, with several firms, including WisdomTree and Bitwise, vying for approval to launch XRP-based ETFs.
As XRP gained momentum, Tether, which had been the dominant stablecoin in the market, saw a slight dip in its market cap. It lost about $1.6 billion recently, coinciding with the implementation of the European Union’s new Markets in Crypto-Assets (MiCA) regulation on December 30, 2024. This regulation mandates stricter compliance for crypto assets within the EU, which may have negatively impacted Tether’s position. On January 2, 2025, Tether’s market cap dropped by 1.2%, further reflecting the challenges it is facing in the wake of MiCA.
Tether has yet to fully recover from its peak market cap of $140 billion in mid-December 2024, especially after Coinbase announced it would remove Tether from its listings due to non-compliance with MiCA regulations. However, some experts remain optimistic about Tether’s future, particularly in Asia. Reports suggest that approximately 80% of Tether’s trading volume comes from Asia, which could help it recover from its losses in the European market. The continued dominance of Tether in the Asian market could potentially offset the regulatory challenges it faces in the EU and allow it to regain some of its lost market share.
