Ripple Market Cap Is On The Rise

December 3, 2021 03:30 PM
Crypto Story of the Day

Crypto Story of the Day




The Top is unchanged this AM. Solana (SOL) has outperformed over the past week, adding 24% to its market cap over the period. 

Crypto Story of the Day

Last December, the SEC announced charges against Ripple and its executives for ‘conducting a $1.3 billion unregistered securities offering’ via the sale of XRP. Since the charges, the token added roughly $35 billion to its market cap.

Ripple CEO Brad Garlinghouhse revealed the SEC was planning to charge the company one day before the regulator made the allegations public knowledge. Garlinghouse described the charges as ‘an attack on the entire crypto industry and American innovation.’ Garlinghouse defended Ripple’s issuance of XRP by arguing that the token’s decentralization was increasing and that the asset was being used as a ‘bridge currency’ in cross-border transactions. 

On the other hand, the SEC contended that Ripple, starting in 2013 ‘through the present,’ sold USD 1.3B worth of XRP to investors in the US and worldwide ‘to fund Ripple’s operations and enrich Larsen and Garlinghouse.’ 

The SEC also alleged that ‘Ripple received legal advice as early as 2012’ that the sale of XRP could be viewed as a security. XRP’s use-cases include ‘On-Demand Liquidity’ (ODL), a cross-border payments system that ‘leverages the digital asset XRP as a bridge between two currencies….’ Among users of ODL was remittances firm Money Gram which first began piloting the solution in 2018. 

However, Ripple was later revealed to have paid MoneyGram a total of USD 61.5M in ‘market development fees’ associated with the use of ODL. Following the SEC’s charges, MoneyGram suspended its cooperation with Ripple. A number of crypto businesses also distanced themselves from XRP. For example, in January, Coinbase suspended XRP trading due to the lawsuit. In November, Ripple announced a partnership with the Republic of Palau to explore a ‘national digital currency and its use cases with the XRP Ledger.’ 

The partnership with the small Micronesian island state with a population of 20,000 will initially focus on developing strategies for cross-border payments and a USD-backed digital currency for Palau built on the XRP Ledger. Following the SEC’s charges, XRP’s market cap dropped from USD 20.3B to as low as USD 9.98B. In April, the coin’s market cap reached USD 83.5B. XRP achieved an all-time high market cap of USD 130.85B in January 2018. Over the past year, Turkey has led Google searches for ‘XRP,’ with the SEC lawsuit appearing as a common related Google query.  

Takeaway: XRP’s current market cap of USD 45B is just under Bank of New York Mellon’s market cap of USD 46B. BNY Mellon has USD 2.2T AUM and through its predecessor, the Bank of New York, is considered one of the oldest banks in the US. Questionable market caps in crypto have been accompanied by narratives and perceived adoption.

XRP, on the other hand, has not been associated with any of the major themes in the bull market of the last year, i.e. DeFi, NFTs, metaverse, etc., while major actors in the crypto space have completely distanced themselves from the token. While the crypto space has seen signs of maturation - i.e. ETF launches in the US and Canada or Twitter’s adoption of the Lightning Network and NFTs - XRP highlights that the space’s development has not dislodged certain questionable market caps.  

Please sign up for a free trial of FRNT Financial Morning Note.

About the Author

FRNT Financial is a technology and sales layer that offers institutional and accredited investors access to various forms of exposure to crypto-assets. You can subscribe to FRNT Financial Morning Note at