XRP Surpasses USDT to Become the Third-Largest Cryptocurrency by Market Cap
XRP has reclaimed its position as the third-largest cryptocurrency by market capitalization, surpassing Tether’s USDT stablecoin. This marks another milestone for XRP as it continues to ride a wave of momentum in the crypto market.
XRP Market Cap Soars
As of January 3, XRP’s market cap surged to $138.98 billion, eclipsing USDT, which fell by $1.6 billion in market cap since December 30. The decline coincides with the enforcement of the European Union’s Markets in Crypto-Assets Regulation (MiCA), which has introduced stricter compliance requirements for stablecoin issuers.
At the time of publication, XRP is trading at $2.43, up 17% over the past two weeks and nearly 280% year-on-year, according to CoinGecko data.
MiCA’s Impact on USDT
USDT’s dip in market share follows Coinbase Europe’s delisting of USDT on December 13, citing noncompliance with MiCA. The regulation requires stablecoin issuers to maintain full reserves and secure licenses to operate in the EU. European regulators have yet to confirm whether USDT complies with these new rules, adding uncertainty to its market position.
Factors Driving XRP’s Rally
XRP’s ascent can be attributed to several key developments:
- ETF Speculation: Speculation around a spot XRP exchange-traded fund (ETF) has bolstered market sentiment. On December 2, WisdomTree became the fourth firm to file for a spot XRP ETF with the U.S. Securities and Exchange Commission (SEC), joining Bitwise, Canary Capital, and 21Shares.
- Pro-Crypto Policy Expectations: Broader optimism in the crypto market followed Donald Trump’s victory in the U.S. presidential election on November 5, as his administration is expected to adopt crypto-friendly policies.
- Ripple Stablecoin Launch: Ripple Labs’ launch of the Ripple USD (RLUSD) stablecoin on December 17 has added to XRP’s utility. RLUSD, a U.S. dollar-backed stablecoin, is set to integrate with Ripple Payments in early 2025 to streamline cross-border enterprise transactions. It has already amassed a $72 million market cap, according to CoinGecko.
Stablecoin Market Overview
Despite XRP’s rise, Tether remains the dominant stablecoin:
- USDT commands 67.21% of the $204 billion stablecoin market, per DefiLlama data.
- Coinbase’s USDC trails as the second-largest stablecoin, with a market cap of $44 billion.
USDT activity continues to thrive, with the user base growing by 11.7% in December, adding 21.9 million new users, primarily on Tron. Meanwhile, USDC saw a 24% increase in new addresses, led by adoption on Solana and Ethereum’s Base layer 2.
Looking Ahead
XRP’s remarkable rally underscores its growing role in the cryptocurrency ecosystem. With developments like potential ETF approvals and the integration of Ripple USD into enterprise systems, XRP is well-positioned to capitalize on its newfound momentum. Meanwhile, Tether’s position in the stablecoin market will likely hinge on its ability to adapt to evolving regulatory requirements.
Stay tuned as XRP’s competition with USDT continues to shape the dynamics of the crypto market in 2025.
