XRP and USDT – Ripple’s Stablecoin Launch Boosts XRP’s Market Momentum
XRP and USDT – XRP has recently flipped Tether’s USDT stablecoin, claiming the spot as the third-largest cryptocurrency by market capitalization, only trailing behind Bitcoin and Ether. As of January 3, XRP surged to a market cap of $138.98 billion, outperforming USDT, which experienced a $1.6 billion drop in market cap since December 30. This shift coincides with the rollout of the European Union’s Markets in Crypto-Assets Regulation (MiCA). At the time of publication, XRP was trading at $2.43, reflecting a 17% increase over the last 14 days. Over the past year, XRP has gained an impressive 280%, showing significant momentum.
MiCA Regulation’s Impact on USDT
The decline of USDT’s market share comes amid the MiCA framework, which enforces stricter rules on stablecoin issuers. These regulations mandate that issuers maintain full reserves and acquire the necessary licenses to operate within the EU. As of December 13, Coinbase Europe delisted USDT, citing noncompliance with MiCA regulations. The continued uncertainty surrounding USDT’s compliance has contributed to its market cap drop.
Meanwhile, XRP has gained ground, partly due to speculation about the potential launch of a spot XRP exchange-traded fund (ETF). In December 2023, WisdomTree became the fourth company to file for an XRP ETF with the US Securities and Exchange Commission (SEC), joining Bitwise, Canary Capital, and 21Shares. This further bolstered confidence in XRP’s potential growth.
Ripple’s Stablecoin and XRP’s Momentum
Ripple Labs launched its own USD-backed stablecoin, Ripple USD (RLUSD), on December 17. Set to integrate into Ripple’s payment system in early 2025, RLUSD aims to facilitate cross-border transactions for enterprise clients. The stablecoin has already amassed a market cap of $72 million, according to CoinGecko, adding more fuel to XRP’s momentum.
Tether’s Ongoing Dominance
Despite the recent decline in market cap, Tether continues to dominate the stablecoin market. As of December 2023, USDT accounts for 67.21% of the $204 billion stablecoin market, according to DefiLlama data. USDC, the second-largest stablecoin, follows with a $44 billion market cap. Despite USDT facing ongoing scrutiny, it saw an 11.7% growth in users in December, adding 21.9 million new users.
In comparison, USDC saw a 24% increase in new addresses in December. However, USDT remains highly active on Tron, accounting for 53.8% of its addresses, while USDC primarily thrives on Solana.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. Cryptocurrencies and stocks, particularly in micro-cap companies, are subject to significant volatility and risk. Please conduct thorough research before making any investment decisions.
Leave a comment