Ripple’s XRP has surged to become the third-largest cryptocurrency by market capitalisation, surpassing notable tokens such as Solana, USDT, and Binance Coin, as the landscape for crypto-friendly policies begins to shift in Washington, D.C.

On Monday, XRP skyrocketed by an impressive 40% within 24 hours, reaching $ 2.80- a milestone it hadn’t achieved in seven years. The cryptocurrency has attracted over $120 billion in new investments, pushing its market cap to $156 billion following the Nov. 5 election of Donald Trump and other pro-crypto candidates.

Crypto News reports that the primary driver behind XRP’s rally was Trump’s victory, expected to usher in more favourable regulations for the crypto sector. This is particularly significant for Ripple Labs, embroiled in a legal battle with the Securities and Exchange Commission since 2020.

The election results have also revived hopes for a spot XRP exchange-traded fund (ETF) by 2025. Earlier this week, asset manager WisdomTree, which oversees $111 billion in assets, applied for a spot Ripple ETF.

In a recent X post, CryptoQuant CEO Ki Young Ju emphasized that whale activity on Coinbase has been a major driver of the XRP rally, with exchange premiums rising between 3% and 13%. In contrast, South Korea’s Upbit exchange- known for its significant XRP trading base-has shown no such premium during this period.

Coinbase whales are driving this $XRP rally.

Over the past 30 days, Coinbase’s minute-level price premium has ranged from 3% to 13% during the surge.

Meanwhile, Upbit—a Korean exchange with more XRP investors than Binance—has shown no significant premium so far. pic.twitter.com/ENESB2Zrkv

— Ki Young Ju (@ki_young_ju) December 2, 2024

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According to Santiment, a leading analytics firm, wallets holding between 1 million and 10 million XRP accumulated 671 million coins within three weeks. This marked the first notable increase in non-empty wallets in eight years, fueled by FOMO-driven buying.

🚀 XRP has skyrocketed to an astounding $2.49 market value for the first time since January 8, 2018. The 6-year (nearly 7-year) high comes as wallets with 1M-10M XRP have accumulated 679.1M tokens (currently worth $1.66B) in just 3 weeks. Also, total non-empty XRP wallets have… pic.twitter.com/bIsfOqdCQX

— Santiment (@santimentfeed) December 2, 2024

However, Ripple’s price could face a potential pullback in the coming weeks. Currently, XRP is trading well above its short- and long-term moving averages, suggesting the possibility of mean reversion, where prices tend to return to their average levels over time.

Moreover, technical indicators like the Relative Strength Index (RSI) and Stochastic Oscillator signal overbought conditions, indicating potential price weakness. XRP may also be in the markup phase of the Wyckoff Method, a stage characterized by demand exceeding supply. This phase is often followed by the distribution phase, typically resulting in a sell-off.

If a pullback occurs, XRP could retreat to retest support at $1.9697, a critical level last reached in April 2021.

WisdomTree, a global provider of financial products, has announced the launch of its latest cryptocurrency exchange-traded product (ETP). The WisdomTree Physical XRP ETP (XRPW) is listed on Deutsche Börse Xetra, the Swiss SIX Exchange, and the Euronext exchanges in Paris and Amsterdam with a management expense ratio of 0.50%, making it the lowest-cost ETP in Europe offering exposure to XRP.

The fund is designed to provide investors with a “simple, secure, and cost-efficient” way to gain exposure to the price of XRP. It is fully backed by XRP, “offering exposure to the spot price of XRP through an institutional-grade, physically backed structure.” Investors will also benefit from a dual custody model with regulated custodians and the underlying assets professionally secured in “cold storage.”

Regarding this cryptocurrency, the fund manager explains: “XRP is a native digital asset of the XRP Ledger (XRPL), a decentralized, permissionless, and open-source blockchain. XRPL uses a Proof-of-Association (PoA) consensus mechanism operated by universities, exchanges, businesses, and individuals to validate transactions. This system is more efficient than Proof-of-Work (PoW), as it requires less hardware resources and consumes less energy.

Created in 2012 specifically for payments, XRP can settle transactions on the ledger in 3-5 seconds and was designed to be a faster and more sustainable alternative to Bitcoin. XRP can be sent directly without a central intermediary, making it a convenient tool for bridging two different currencies quickly and efficiently. It is freely traded on the open market and is used in real-world applications to enable cross-border payments and microtransactions.”

Following this launch, Dovile Silenskyte, Head of Digital Asset Analysis at WisdomTree, suggests that with increasing risk appetite, exposure to altcoins like XRP could outperform a standard Bitcoin and Ether allocation. In her view, XRP can be considered alongside these megacaps in a multi-asset portfolio to reduce exposure to a single token. “Cryptocurrencies represent more than 1% of the market portfolio and should therefore be part of a comprehensive investment strategy. As an asset class with low correlation to traditional asset classes, cryptocurrencies can help increase diversification and potentially improve risk-adjusted returns in a multi-asset portfolio,” Silenskyte adds.

Meanwhile, Alexis Marinof, Head of Europe at WisdomTree, highlighted: “This new launch complements our existing range of physically backed cryptocurrency ETPs, offering investors another solution to enhance their multi-asset portfolios. Cryptocurrency ETPs are an effective way to keep investors within a regulated framework and are becoming the preferred vehicle for accessing cryptocurrencies. WisdomTree has 20 years of experience in providing and managing physically backed ETPs for institutional investors. With over $100 billion in assets under management globally across ETFs and ETPs, investors in our cryptocurrency ETPs can benefit from our global reach, scale, and resources.”