Why is XRP Rallying?

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The XRP token has surged dramatically in recent weeks, capturing the attention of investors and crypto enthusiasts alike. Trading above $2.40 at the time of writing, XRP has rallied over 60% in a single week and nearly quadrupled in value during November alone. This explosive price movement has been fueled by a combination of strong on-chain activity, favorable regulatory developments, and new financial product launches—signaling growing confidence in Ripple’s long-term potential.

But what exactly is driving this rally? Let’s break down the key factors behind XRP’s momentum and explore why market participants are increasingly optimistic about its future.

XRP’s Price Surge and Market Position

Ripple’s native cryptocurrency, XRP, reached a six-year high of $2.49 on Monday, surpassing its previous peak from January 2018. This milestone marks a significant psychological and technical breakthrough, reinforcing bullish sentiment across the market.

According to CoinGecko, XRP has now overtaken Tether (USDT) to become the third-largest cryptocurrency by market capitalization—a remarkable shift that underscores renewed institutional and retail interest. With momentum building, many analysts are speculating whether XRP could push toward $3 or beyond in the coming weeks.

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This surge isn't just speculative; it's supported by concrete on-chain data showing increased adoption and network usage.

On-Chain Metrics Signal Strong Demand

Beneath the surface of rising prices lies a foundation of robust on-chain activity—key indicators that validate the strength and sustainability of XRP’s rally.

Daily Active Addresses at Multi-Year High

Santiment’s Daily Active Addresses metric shows a sharp increase, jumping from 45,409 on Saturday to 109,070 by Monday—the highest level since August 2023. This doubling in active users suggests growing engagement with the XRPLedger, reflecting real-world usage and demand for XRP-powered transactions.

More active addresses mean more wallets interacting with the network, whether for payments, trading, or staking. In traditional financial terms, this is akin to seeing a surge in customer transactions for a payment processor—clear evidence of expanding utility.

Open Interest Doubles in Two Days

Open Interest (OI) in XRP futures markets has also skyrocketed. Data from Coinglass reveals that OI climbed from $2.27 billion to $4.18 billion in just two days—an almost 84% increase. A rising OI indicates new capital entering the market, typically through long (buy) positions, which often precedes further price appreciation.

When traders open new leveraged positions, especially in large volumes, it reflects strong conviction in continued upside potential. The rapid growth in OI suggests institutional and retail traders alike are betting on higher prices.

Record-Breaking Trading Volume

Token Terminal data highlights another bullish signal: XRP’s daily trading volume spiked to $25.75 billion on November 16—the highest level of the year. Sustained high volume confirms that the rally is not driven by isolated pumps but by widespread market participation.

High liquidity reduces slippage and enhances price stability, making XRP more attractive to institutional investors who require deep markets for large-scale entries and exits.

Catalysts Behind the Bull Run

While technical metrics provide validation, several fundamental catalysts have ignited the current rally.

SEC Chair Gary Gensler’s Resignation Announcement

On November 21, 2024, U.S. Securities and Exchange Commission (SEC) Chair Gary Gensler announced he would step down on January 20, 2025. His departure marks a potential turning point for U.S. crypto regulation.

Under Gensler’s leadership, the SEC pursued an aggressive “regulation by enforcement” strategy, most notably in its prolonged legal battle with Ripple Labs over whether XRP qualifies as a security. That case has hung over the market for years, creating uncertainty for developers, exchanges, and investors.

With Gensler stepping down, there is growing hope that his successor will adopt a more balanced, innovation-friendly approach. Analysts believe this shift could lead to a favorable resolution in the Ripple lawsuit—potentially unlocking new use cases, exchange listings, and financial products tied to XRP.

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WisdomTree Launches Physical XRP ETP in Europe

On the same day as Gensler’s resignation announcement, WisdomTree launched its physically backed XRP exchange-traded product (ETP) across major European exchanges including Börse Xetra, SIX Swiss Exchange, and Euronext Paris and Amsterdam.

This regulated financial product allows traditional investors to gain exposure to XRP without managing private keys or navigating crypto exchanges—a major step toward mainstream adoption. It also enhances liquidity and credibility for XRP within institutional circles.

The launch signals growing recognition of XRP as a legitimate digital asset worthy of inclusion in diversified portfolios. Market watchers now anticipate similar products could emerge in the U.S., particularly if regulatory conditions improve.

Frequently Asked Questions About XRP

Q: What is Ripple and how does it differ from XRP?
A: Ripple is a fintech company focused on cross-border payments using blockchain technology. Its network, RippleNet, enables fast and low-cost international transfers for financial institutions. XRP is the native cryptocurrency of the XRPLedger—the decentralized blockchain that powers transactions within this ecosystem.

Q: What is XRPLedger?
A: XRPLedger is an open-source, permissionless distributed ledger that supports fast, low-cost transactions using XRP. Unlike proof-of-work blockchains, it uses a consensus protocol that enables quick settlement without energy-intensive mining. It also includes built-in anti-spam mechanisms to prevent DDoS attacks.

Q: How does XRP facilitate cross-border payments?
A: XRP acts as a bridge currency between different fiat currencies. Instead of relying on pre-funded nostro accounts, banks can convert one currency into XRP instantly and then into the target currency at the destination—reducing costs, settlement times, and liquidity requirements.

Q: Can XRP be used outside of Ripple’s ecosystem?
A: Yes. While Ripple promotes XRP for global payments, the XRPLedger supports decentralized finance (DeFi) applications, NFTs, and smart contracts. Developers can build on it independently, making XRP useful beyond just cross-border remittances.

Q: Is the SEC lawsuit over?
A: As of late 2024, the case continues, but partial rulings have favored Ripple on key issues—such as determining that XRP sales on public exchanges do not constitute securities offerings. The outcome remains uncertain, but sentiment has improved following leadership changes at the SEC.

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Looking Ahead: What’s Next for XRP?

The convergence of strong on-chain data, regulatory optimism, and institutional product launches paints a compelling picture for XRP’s future. While short-term volatility is inevitable in any crypto market, the current rally appears to be built on more than speculation—it reflects real progress toward broader adoption.

As global financial institutions continue seeking efficient alternatives to legacy systems like SWIFT, Ripple’s technology—and by extension, XRP—stands poised to play a critical role in modernizing cross-border payments.

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Whether you're an investor, developer, or observer, now is a pivotal moment to understand the forces reshaping one of crypto’s most enduring projects.

With multiple tailwinds aligning—from regulatory shifts to financial innovation—the question isn’t just why XRP is rallying—but how far it might go from here.