XRP Price Hits 3-Year High as Futures Open Interest Hits New Record

XRP, run by payments and digital asset infrastructure company Ripple Labs, is trading at levels not seen in three years as the broader crypto market benefits from expected political tailwinds in the United States.

Although the asset lost 16% of its value from Saturday’s high of $1.20, it is still up more than 80% on the week to $1.06, according to CoinGecko data.

The coin has been on a clear upward trajectory since the arrival of President-elect Donald Trump. secure victory in the US presidential election earlier this month.

This has boosted investor interest in several cryptocurrencies, including meme coins, which continue to lead the market rally in terms of total performance, alongside relative gains for large-cap coins.

This is no more evident than in the futures market of the world’s sixth-largest cryptocurrency, with open interest having reached record highs just below $2 billion, CoinGlass. data watch.

CoinDesk was the first to report the news.

Open interest represents the total number of active futures or options contracts that remain open and have not yet been settled or closed.

A high OI often reflects an increase in speculative trading, with traders betting on future price movements. This can lead to greater volatility as leveraged positions amplify reactions to news or market events.

“The recent spike in XRP futures opens interest to record levels means an increase in trader interest, often an indicator of the market’s uptrend,” said Nick Forster, founder of the options protocol in DeFi chain, Derive. Decrypt.

Coupled with consistently high and positive funding rates, this suggests that new market participants could capitalize on the “business opportunity base of XRP,” the founder added.

Basis trading refers to a strategy that seeks to profit from the difference between the spot price of an asset and its price in the futures or derivatives market.

“This activity highlights the growing appeal of XRP and its dynamic position within the trading community, suggesting speculative optimism as traders position themselves to take advantage of anticipated price movements,” Forster said.

It comes amid speculation this month Securities and Exchange Commission Chairman Gary Gensler could resign soon after Trump’s Jan. 20 inauguration.

Gensler, according to many in the industry, persisted in what they called a “crusade” against digital asset companies, including Ripple.

Initiated in December 2020, the SEC’s lawsuit against Ripple Labs alleged that the company and its founders sold XRP to investors deemed to be securities. In July 2023, a federal judge ruled that XRP was not a security when sold to retail investors, but that institutional sales violated securities laws, resulting in a $125 million penalty for Ripple.

The SEC appealed this decision, and the court set a January 2025 deadline for the SEC’s final submissions.

With its potential departure, Ripple, and by extension, XRP, may have a clearer path to regain market confidence and expand its use case without the overhang of regulatory uncertainty, depending on the outcome of the affair.

With the upcoming change in US political leadership, XRP traders are hoping that the SEC may soften its stance in court regarding the classification of XRP as a security.

Trump declared his intention to “fire Gary Gensler on day one.” Even if Trump can’t directly fire Gensler, analysts Decrypt previously spoke to speculate that Gensler could voluntarily resign within the next six months.

It could also boost prospects for a U.S.-listed cash exchange-traded fund for the asset, analysts have previously said. Decrypt.

As evidenced by the recent price rally, XRP investors are banking on these developments, said Pratik Kala, portfolio manager and head of research at digital asset fund manager Apollo Crypto. Decrypt.

“XRP is rising due to rumors that Ripple CEO Brad Garlinghouse is advising Trump on crypto policy,” Kala said.

This has boosted trader sentiment, and as Bitwise has already filed for an XRP ETF, some are linking these developments in hopes of capturing upside potential, he added.