XRP Sees Dramatic Surge Following Trump’s Election Victory
XRP, the cryptocurrency underpinning the XRP Ledger blockchain, has emerged as one of the major beneficiaries of Donald Trump’s presidential election win on November 5th. In a remarkable turnaround, XRP surged as much as 440%, reaching a peak of $2.86, marking its highest price since the initial coin offering boom of 2017-2018. Despite a market valuation that currently stands at around $143 billion, XRP faced skepticism earlier this year when Forbes dubbed it a “Zombie Blockchain,” questioning its utility and effectiveness in replacing Belgium’s SWIFT for international bank transfers. Critics have argued that XRP has failed to fulfill its original mission of facilitating significant cross-border transactions.
The surge in XRP’s price has resulted in substantial gains for Ripple Labs co-founder Chris Larsen, who has seen half of his net worth tied up in XRP tokens. Following the election, his wealth ballooned by 278%, soaring from $3.3 billion to approximately $9.2 billion. This windfall reflects a broader trend where investors are increasingly optimistic about XRP’s prospects, buoyed by anticipations of a more favorable regulatory environment under Trump, who is perceived as more pro-crypto compared to previous administrations.
The SEC has long scrutinized XRP, particularly following its lawsuit in December 2020, which labeled the sale of XRP tokens as part of an unregistered securities offering totaling $1.3 billion. In a notable ruling issued in July 2023, Judge Analisa Torres determined that Ripple’s private sales of approximately $728.9 million to institutional investors breached U.S. securities laws. However, she ruled favorably for Ripple regarding its retail sales through exchanges, deeming them permissible. Currently, Ripple and the SEC are engaged in negotiations to determine an appropriate penalty for the violations.
Pivotal in this situation was the previous SEC leadership under Trump appointee Jay Clayton, who initiated the enforcement action against Ripple. In contrast, his successor, Gary Gensler, has been perceived as a more aggressive regulatory figure, taking a harder stance against various crypto exchanges. With Gensler announcing his resignation effective January 2024, speculation is rife within the crypto community regarding who will assume his role and how they might approach the regulation of digital assets, particularly XRP.
The outlook for XRP and the broader crypto market could significantly improve depending on the regulatory decisions to come, especially if the new SEC head opts to resolve ongoing legal entanglements swiftly. Experts believe that a resolution regarding the SEC lawsuit may pave the way for multiple spot exchange-traded funds (ETFs) that track the price movements of XRP. This would follow a trend established last year with the launch of various ETFs tracking Bitcoin and Ethereum, which together account for $116 billion in assets.
In the lead-up to the election, several XRP ETF applications, including those from entities like Bitwise, Canary, and 21Shares, were filed as confidence grew in a pro-crypto regulatory climate post-election. The industry is hopeful that with Trump’s return to power, the legal uncertainties surrounding XRP will dissipate, allowing for greater adoption and investment in the cryptocurrency. As XRP dueled against skepticism and regulatory obstacles, the developments following the election signal a crucial moment for the cryptocurrency’s future and its potential re-establishment in the competitive digital asset landscape.
