5 Major Causes of XRP Price Increase in the Spotlight

Bittime - The price of XRP has risen sharply, becoming one of the most talked about altcoins in the crypto market. Check out the 5 main causes of XRP's price rise in the spotlight, ranging from pro-crypto policies to a potential XRP ETF.

XRP, a cryptocurrency issued by blockchain company Ripple, has registered a significant price surge in recent times.

In the first week of December, XRP reached a six-year high of $2.48, positioning itself as the world's third-largest crypto by market capitalization.

While this price is still below the all-time high of $3.40 in 2018, a number of factors underpinned this surge. In this article, we'll look at the 5 main reasons that have driven the price of XRP crypto to skyrocket.

This notable rise in XRP price comes amidst various political and economic changes affecting the crypto market as a whole.

Also read: Is Now the Right Time to Buy XRP?

In recent months, the crypto market has undergone significant changes, and XRP has benefited greatly from several external factors driving demand. Here are the main reasons that could explain the surge in XRP price.

1. Trump's Victory and its Impact on Pro-Crypto Policies

One of the most talked about factors was Donald Trump's victory in the US presidential election in November 2024.

This victory has had a positive impact on the crypto market, with many investors believing that more crypto-friendly policies will be implemented under a Trump administration.

Ripple CEO, Brad Garlinghouse, stated that Trump will bring a golden age to the crypto world. Trump's victory triggered a five-fold surge in the price of XRP since the election, signaling growing optimism in the crypto market.

2. Resignation of SEC Chairman, Gary Gensler

The departure of Gary Gensler, the Chairman of the SEC (Securities and Exchange Commission) who was known for his strict stance on the crypto industry, is also considered to be a driving factor in the rise of XRP prices.

During Gensler's tenure, Ripple was involved in a long-running legal battle with the SEC regarding allegations of selling unregistered securities.

With his retirement expected to occur in January 2025, many hope that more crypto-friendly regulations will be implemented soon, paving the way for further growth of XRP.

3. Increased Retail Trade

XRP's price surge has also been driven by increased trading activity on platforms such as Coinbase and Robinhood.

After being de-listed from Robinhood in 2020 due to regulatory scrutiny, XRP was re-listed on the platform in August 2024.

This revived the interest of retail investors, especially among the South Korean community who actively traded XRP on local exchanges such as Upbit and Bithumb.

This trading activity created considerable demand, which contributed to the surge in XRP's price.

4. Potential for an XRP ETF

One factor that many investors are eagerly anticipating is the potential approval of an XRP ETF. After the success of ETFs for Bitcoin and Ethereum, Solana and XRP are now strong candidates to have their own ETFs.

If the XRP ETF is approved by the SEC, this could be a huge catalyst to push the price of XRP higher. Several companies, such as Bitwise Asset Management and 21Shares, have already filed for an XRP ETF.

Market analysts believe that ETF approval could take XRP to higher price levels.

5. Altcoin Season: Changes in Crypto Market Dominance

The change in crypto market dominance has also played a role in XRP's price rise. Since Trump's victory, the crypto market as a whole has seen significant growth, with Bitcoin approaching the $100,000 mark.

However, while Bitcoin remains the market dominator, its dominance of the crypto market has decreased, making room for altcoins like XRP to thrive.

Bitcoin's decline in dominance usually signals the start of “altcoin season,” where investors' attention turns to other promising cryptocurrencies.

Also read: If XRP ETF is Approved: Which Cryptos Will Skyrocket and When is the Best Time to Buy?

Conclusion

XRP's significant price rise can be attributed to a number of important factors, ranging from Trump's victory and pro-crypto policies, the resignation of SEC Chairman Gary Gensler, to the potential for an XRP ETF. Coupled with the rise in retail trading and the changing dominance of the crypto market, XRP is in a good position to continue growing. For investors looking for opportunities in the crypto market, XRP is one option worth keeping an eye on.

FAQ

Why has the price of XRP spiked recently?

The price of XRP surged due to several factors, including Donald Trump's victory in the US presidential election, which fueled optimism about pro-crypto policies. In addition, the resignation of Gary Gensler, Chairman of the SEC, as well as an increase in retail trading and the potential approval of an XRP ETF helped boost demand and XRP price.

What impact will Donald Trump's victory have on the price of XRP?

Trump's victory was considered positive for the crypto market as many investors hoped that pro-crypto policies would be implemented, which could support the growth of XRP. The crypto market experienced a significant surge after the election, with XRP rising fivefold.

What is an XRP ETF and how does it affect the price?

An XRP ETF is an exchange-traded fund that allows investors to buy shares of XRP without having to directly purchase the coins. If an XRP ETF is approved by the SEC, it could increase demand and push the price of XRP higher, as has happened with Bitcoin and Ethereum.

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References

dlnews.com, What's going on with XRP? Five reasons why the Ripple-issued crypto is surging, accessed on December 3, 2024.

Author: AWW