XRP Hits 3-Year High with Record-Breaking Futures Interest

XRP, the digital asset overseen by Ripple Labs, has surged to price levels not seen in three years, boosted by broader optimism in the cryptocurrency market and anticipated political tailwinds in the United States.

As of now, XRP is trading at $1.15, marking an impressive 83% weekly gain despite a slight pullback from its recent peak of $1.20, according to CoinGecko. In fact, the cryptocurrency's recent uptrend began shortly after President-elect Donald Trump secured victory in the U.S. presidential election earlier this month. Trump's proposed pro-business policies and his criticism of regulatory overreach have fueled investor optimism across the crypto sector.

This rally isn't limited to XRP. Memecoins and large-cap cryptocurrencies are also experiencing significant gains as traders position themselves ahead of potential policy shifts. XRP, however, has become a focal point due to its central role in ongoing regulatory discussions.

The enthusiasm for XRP is evident in the futures market. Open interest—a metric indicating the total number of active futures contracts—has reached record levels just below $2 billion, according to data from CoinGlass.

High open interest often signals increased speculative activity, with traders betting on future price movements. "The recent spike in XRP futures open interest reflects heightened trader interest, often a bullish market indicator," explained Nick Forster, founder of DeFi protocol Derive.

He added that high and positive funding rates suggest new participants are entering the market to capitalize on arbitrage opportunities between spot and futures prices, a strategy known as basis trading.

Nonetheless, the rally comes amid ongoing regulatory uncertainty surrounding XRP.

The U.S. Securities and Exchange Commission (SEC) filed a lawsuit against Ripple Labs in December 2020, alleging the company had conducted unregistered securities sales. While a federal court ruled in July 2023 that XRP is not a security when sold to retail investors, institutional sales were deemed to have violated securities laws, resulting in a $125 million penalty for Ripple.

The SEC has since appealed the decision, with final briefings scheduled for January 2025. Despite this, optimism remains high, particularly as speculation mounts over SEC Chair Gary Gensler’s possible departure following Trump’s inauguration in January.

Gensler, often criticized for his stringent stance on digital assets, could step down in the coming months, potentially paving the way for more favorable regulatory outcomes for XRP.

The Road Ahead: ETF Hopes and Market Sentiment

Ripple CEO Brad Garlinghouse has expressed confidence in the approval of an exchange-traded fund (ETF) for XRP, following the recent greenlighting of Bitcoin and Ethereum ETFs in the U.S.

Fund manager Bitwise filed for an XRP ETF earlier this month, which, if approved, would allow investors to gain exposure to the cryptocurrency through traditional financial markets.

Rumors that Garlinghouse may advise Trump on crypto policy have further bolstered trader sentiment. "XRP is rising due to speculation that Ripple’s leadership may have a direct influence on shaping U.S. crypto regulation," noted Pratik Kala, portfolio manager at Apollo Crypto.

With a potential regulatory shift and increasing market interest, XRP appears poised for a new chapter. The asset’s recent price movements underscore its importance within the crypto ecosystem, as traders and investors remain optimistic about its future in a rapidly evolving landscape.