As XRP surges above $1 ahead of Cardano and Dogecoin, discussions have emerged over whether it could compete with Ethereum as the second-largest crypto asset.
XRP stunned the crypto market this weekend. flew away passed $1, ahead of Cardano (ADA) and Dogecoin (DOGE). Prior to this surge, the crypto community had been embroiled in a debate over which assets among XRP, ADA, and DOGE would hit the $1 mark first.
XRP hits $1 before ADA and DOGE
For context, XRP and ADA were trading above $1. However, they plunged below this level due to a sell-off that began immediately after the 2021 rally.
While ADA and DOGE recently saw a significant rise for the first time, XRP has been hovering around the $0.57 mark for several days. Therefore, DOGE overtook XRP in the global cryptocurrency rankings, pushing it to the eighth position.
Interestingly, things have changed for XRP following reports that Ripple CEO Brad Garlinghouse met with US President-elect Donald Trump. This sparked speculation about an imminent resolution to the Ripple lawsuit. Amid speculation, XRP rallied significantly, surpassing $1 for the first time since 2021.
XRP has since overtaken Dogecoin, cementing its position as the sixth-largest cryptocurrency with a market capitalization of $62.2 billion.
XRP and ETH rivalry
Following XRP’s remarkable performance, there is speculation that it could aim to challenge Ethereum (ETH) for second place.
In 2014, XRP was ranked as the second largest cryptocurrency by market capitalization, just behind Bitcoin. It maintained this position until the launch of Ethereum the following year, putting the two assets in a tight competition for second place.
However, Ethereum took full control of the second position in June 2018 after former SEC Director William Hinman declared ETH not to be a security. Things got worse two years later when the SEC accused Ripple of violating federal securities laws during its past XRP sales.
This pushed XRP to seventh position last year, with Dogecoin recently expanding the asset’s ranking to eighth place. With the recent rally, XRP appears poised to challenge Ethereum again for the second position.
Can XRP Reclaim Ethereum’s Second Position?
XRP’s potential rise to the second position in the global cryptocurrency rankings would be a challenge. Currently, Ethereum is the second largest cryptocurrency, with a market capitalization of $376.45 billion.
This suggests that XRP’s market cap needs to increase by 505.22% to reach ETH’s $376.45 billion valuation. A growth rate of this magnitude would bring the price of XRP to around $6.59 from the current level of $1.09, assuming the circulating supply of the coin remains fairly constant at 56.93 billion.
While XRP’s surge to $1 builds investor confidence in the asset, challenging Ethereum for second place requires the alignment of multiple initiatives, from institutional adoption to regulatory clarity.
Interestingly, XRP received much-anticipated clarity in July 2023 when a federal court deemed it insecure. Additionally, strong institutional demand for XRP is expected to follow if the US SEC approves the launch of one or more ETFs linked to the asset.
Despite this, it is still unclear whether XRP can compete with ETH for second place in the global cryptocurrency rankings. Future price action on XRP will help determine whether it may pose a threat to Ethereum.
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