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With XRP soaring past $1 ahead of Cardano and Dogecoin, discussions have emerged regarding whether it could challenge Ethereum as the second-largest crypto asset.
XRP stunned the crypto market over the weekend after it soared past $1, ahead of Cardano (ADA) and Dogecoin (DOGE). Before this surge, the crypto community had been entangled in a debate regarding which assets among XRP, ADA, and DOGE would first hit the $1 mark.
XRP Hits $1 Before ADA and DOGE
For context, both XRP and ADA had traded above $1. However, they plunged below this level due to a broader sell-off that started immediately after the 2021 bull run.
While ADA and DOGE first saw a significant uptick recently, XRP hovered around the $0.57 mark for several days. Consequently, DOGE surpassed XRP in the global crypto ranking, pushing it to the eighth position.
Interestingly, things changed for XRP following reports that Ripple CEO Brad Garlinghouse met with U.S. President-Elect Donald Trump. This triggered speculations of an imminent resolution of the Ripple lawsuit. Amid the speculation, XRP rallied tremendously, spiking above $1 for the first time since 2021.
Ever since, XRP has surpassed Dogecoin, cementing its position as the sixth-biggest cryptocurrency with a $62.2 billion market cap.
XRP and ETH Rivalry
Following XRP’s remarkable performance, there are speculations that it could be aiming to challenge Ethereum (ETH) for second place.
In 2014, XRP was ranked as the second-biggest cryptocurrency by market cap, just behind Bitcoin. It maintained this position until Ethereum launched the following year, putting both assets in a tight contest for second place.
However, Ethereum gained complete control of the second position in June 2018 after former SEC Director William Hinman declared ETH a non-security. Things worsened two years later when the SEC charged Ripple with violating federal securities laws through its past XRP sales.
This pushed XRP to the seventh position last year, with Dogecoin recently extending the asset’s ranking to the eighth spot. With the recent rally, XRP looks set to rechallenge Ethereum for the second position.
Can XRP Reclaim Second Position from Ethereum?
XRP’s potential climb to the second position in the global crypto ranking would be challenging. Currently, Ethereum is the second-biggest cryptocurrency, with a market cap of $376.45 billion.
This suggests that XRP’s market cap must grow by 505.22% to reach ETH’s $376.45 billion valuation. A growth rate of this magnitude would take XRP’s price to around $6.59 from the current level of $1.09, assuming the coin’s circulating supply remains fairly constant at 56.93 billion.
While XRP’s surge to the $1 mark bolsters investors’ confidence in the asset, challenging Ethereum for the second position requires the alignment of several initiatives, ranging from institutional adoption to regulatory clarity.
Interestingly, XRP received the highly anticipated clarity in July 2023 when a federal court labeled it a non-security. Furthermore, strong institutional demand for XRP is expected to follow suit should the U.S. SEC approve the launch of one or more ETFs tied to the asset.
Despite this, it remains unclear whether XRP can challenge ETH for second place in the global crypto ranking. XRP’s future price actions will be instrumental in determining whether it can pose a threat to Ethereum.