XRP Surpasses USDT, Becomes #3 Cryptocurrency by Market Cap

XRP has once again surpassed Tether's USDT stablecoin to become the third-largest cryptocurrency by market capitalization, trailing only Bitcoin and Ether. This shift reflects a dynamic period in the crypto market, influenced by evolving regulations, ETF speculation, and the launch of new stablecoins.

On January 3rd, XRP's market cap surged to $138.98 billion, overtaking USDT, which experienced a $1.6 billion market cap decline since December 30th. This timing coincides with the rollout of the European Union’s Markets in Crypto-Assets Regulation (MiCA), which introduces stricter rules for stablecoin issuers operating within the EU, requiring full reserves and licenses.

According to CoinGecko, XRP was trading at $2.43 at the time of writing, marking a 17% increase over the past two weeks and a remarkable 280% surge over the past year. This impressive performance contrasts with USDT’s decline, which some analysts attribute to MiCA's impact. Coinbase Europe's December 13th delisting of USDT, citing MiCA noncompliance, further underscores the regulatory pressure. Notably, Coinbase and Circle jointly launched USD Coin (USDC) in 2018, with Coinbase holding an equity stake in Circle.

This isn't the first time XRP has overtaken USDT. A similar shift occurred on December 1st, when XRP surpassed both Solana (SOL) and USDT. This latest surge coincides with growing speculation surrounding a potential spot XRP exchange-traded fund (ETF). WisdomTree recently joined Bitwise, Canary Capital, and 21Shares in filing for a spot XRP ETF with the U.S. Securities and Exchange Commission, following the approval of spot Bitcoin ETFs in January 2024.

Adding another layer to this dynamic, Ripple Labs launched its own US dollar-backed stablecoin, Ripple USD (RLUSD), on December 17th. With a current market cap of $72 million (per CoinGecko), RLUSD is slated for integration into Ripple Payments in early 2025, aiming to streamline cross-border transactions for enterprise clients.

Despite these developments, Tether remains the dominant stablecoin. As of December, USDT held a 67.21% share of the $204 billion stablecoin market, according to DefiLlama data. USDC, the second-largest, holds a significantly smaller $44 billion market cap. Dune dashboard data reveals that USDT's user base grew by 11.7% in December, adding 21.9 million new users, while USDC saw a 24% increase with 5.7 million new addresses created.

The cryptocurrency landscape continues to evolve rapidly, with regulatory developments like MiCA, the emergence of new stablecoins, and ETF speculation playing significant roles. XRP's recent surge highlights the dynamic nature of the market and the ongoing competition among leading digital assets.