The price of XRP climbed above $3.00 on Monday, hitting a six-month high as investor optimism about the asset’s usefulness and more favorable regulatory environment rose.
The asset may also benefit from tokenization trends over the coming years, Matt Kreiser, an analyst at crypto analytics platform Messari, told Decrypt. He noted that XRP’s price movements over the past week are reminiscent of strength seen late last year.
“It’s a resurgence of what happened in the fall after the election of Trump,” he said, noting the buoyancy in markets after the crypto-supportive president won a second term.
XRP, the Ripple-linked cryptocurrency, was recently changing hands around $2.92, a 2.2% increase over the past day, according to crypto data provider CoinGecko. Its price has spiked 27% over the past week. Its movements have mirrored the seesawing of Bitcoin, which rose to its latest in a series of record highs early Monday before retreating.
Financial institutions are becoming increasingly interested in representing real-world assets, such as stocks and bonds, on-chain using tokens. Along those lines, Keisar said that XRP Ledger, XRP’s blockchain, has compliance features “at the chain level” that could theoretically make it easier for a financial institution to tokenize and manage a product on-chain.
What’s more, Kreiser said that efforts to bring smart contracts to XRP Ledger, and the introduction of an Ethereum-compatible sidechain, could benefit the network’s adoption. Meanwhile, stablecoin legislation is inching toward passage on Capitol Hill.
With Cardano rising 27% over the past week to $0.73, it appears that individual investors are reaching for projects that became popular during the pandemic-era crypto boom, Carlos Guzman, an analyst at crypto market GSR, told Decrypt.
“These assets are widely available, have a lot of retail awareness, and are on a lot of platforms,” he said. “It’s pretty similar to what we saw in November [and] December.”
Under previous leadership at the U.S. Security and Exchange Commission, XRP’s business model faced existential threats, analysts say. But with the agency’s enforcement action against Ripple Labs ending, those same headwinds no longer exist.
The shift was flagged recently by Ripple CEO Brad Garlinghouse, who said the firm’s work with bank BNY on securing stablecoin reserves “is a way to continue to build trust in this system.”
As a cryptocurrency designed for cross-border and cross-currency payments, XRP is similar to most stablecoins, but the asset is “uniquely positioned” within one of the fastest growing uses for digital assets, analysts at investment bank Standard Chartered wrote in April.
The bank sees the XRP’s price reaching $5.50 by the end of this year, citing the potential debut of an XRP-linked exchange-traded fund in the U.S., stablecoin adoption, and tokenization trends.
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