As the cryptocurrency market continues to evolve, XRP has made a significant leap, surpassing Tether’s (USDt) market capitalization to claim its spot as the third-largest cryptocurrency. This development comes hot on the heels of the European Union’s Markets in Crypto-Assets (MiCA) Regulation, which has led to a decline in USDt’s market share.
XRP’s Market Cap Surges
According to CoinGecko, XRP’s market cap has surged to $138.98 billion, surpassing USDt’s market cap of $137.38 billion. This significant increase in market capitalization has pushed XRP to become the third-largest cryptocurrency, trailing only Bitcoin (BTC) and Ether (ETH).
MiCA Regulation Takes Effect
The MiCA framework, which took effect on January 3, imposes stricter regulations on stablecoin issuers. One of the key requirements is that stablecoin issuers must maintain full reserves and obtain licenses to operate within the European Union. This has led to a decline in USDt’s market share, as some exchanges have begun to delist USDT due to noncompliance with MiCA regulations.
Coinbase Delists USDT
On December 13, Coinbase Europe delisted USDT, citing noncompliance with MiCA regulations. This move has been seen as a significant blow to USDt’s market share, and it remains to be seen whether the exchange will re-list USDT in the future.
XRP’s Recent Rally
XRP’s recent rally began after Donald Trump’s victory in the United States presidential election on November 5. This led to an increase in broader market sentiment driven by expectations of pro-crypto policies under the incoming administration. The speculation surrounding a spot XRP exchange-traded fund (ETF) has also fueled XRP’s momentum.
WisdomTree Files for Spot XRP ETF
On December 2, WisdomTree became the fourth company to file for a spot XRP ETF with the US Securities and Exchange Commission (SEC). This move is seen as a significant step towards institutional investment in XRP, which could further boost the cryptocurrency’s market capitalization.
Ripple Labs Launches RLUSD
On December 17, Ripple Labs launched Ripple USD (RLUSD), a US dollar-backed stablecoin. The stablecoin is set to integrate into Ripple Payments in early 2025 to facilitate cross-border transactions for enterprise clients. RLUSD has already amassed a market cap of $72 million, according to CoinGecko.
Tether Remains Dominant Stablecoin
Despite the decline in USDt’s market share, Tether remains the dominant stablecoin. As of December, USDT accounts for 67.21% of the $204-billion stablecoin market, according to data from DefiLlama. Coinbase’s USDC is the second-largest stablecoin, trailing behind at $44 billion in market cap.
USDT User Base Grows
Despite ongoing fear, uncertainty, and doubt (FUD), the USDT user base grew by 11.7% in December, adding 21.9 million new users. This growth is significant, given that USDt’s decline in market share has been attributed to MiCA regulations.
Address Activity
According to a Dune Analytics dashboard, most USDT activity remains on Tron, accounting for 53.8% of addresses. In contrast, USDC sees the most traction on Solana, where 30% of its users reside, followed by Ethereum layer-2 Base with 6.5%.
XRP’s Future Prospects
As XRP continues to gain momentum, it remains to be seen whether the cryptocurrency will maintain its position as the third-largest cryptocurrency. The speculation surrounding a spot XRP ETF and Ripple Labs’ launch of RLUSD are both significant factors that could further boost XRP’s market capitalization.
Conclusion
In conclusion, XRP has made a significant leap in surpassing Tether’s USDt to become the third-largest cryptocurrency. This development comes amid MiCA regulations, which have led to a decline in USDt’s market share. As XRP continues to gain momentum, it remains to be seen whether the cryptocurrency will maintain its position and continue to grow in the future.
References
- CoinGecko: XRP Market Cap Surges to $138.98 Billion
- DefiLlama: Stablecoin Market Share
- Dune Analytics: USDT Address Activity