Ripple (XRP) Surges as New SEC Administration Promises Crypto-Friendly Policies

This assumption is based on the fact that the rally was mainly driven by spot volume instead of "short-term speculative bets." This indicates that it might be not just a flash in the pan since the buyers likely have confidence in the token's "long-term potential."

The recent rally in XRP is likely being driven by buyers who have no intention of quickly selling their tokens, according to Ripple.

In its latest market report, the company noted that the token’s price had surged mainly due to spot volume, rather than speculative bets, in a development that could bode well for the token’s long-term potential. The report reads:

“Notably, we believe that the recent buyers of the token were buying to hold. This assumption is based on the fact that the rally was mainly driven by spot volume instead of, for example, short-term speculative bets on derivatives. This lack of heat in the derivatives market suggests that the recent rally might be not just a flash in the pan since it seems to be driven by buyers who have confidence in the token’s long-term potential.”

The spot-driven rally was seen on exchanges like Binance, Upbit, and Coinbase, with the token’s average daily volume reaching $3.4 billion on top-tier exchanges.

The token is also benefiting from anticipations of the new SEC administration adopting crypto-friendly policies. Ripple is predicting that the industry might experience “unprecedented growth” due to the recent change in SEC leadership.

Ripple, of course, has been engaged in a yearslong legal battle with the agency. In its recent report, the company said that the XRP had rebounded after years of “market manipulation” perpetrated by the SEC.

“After years of the SEC’s price suppression and market manipulation activities, XRP has begun to rebound in anticipation of a more rational and balanced approach by the new administration of the SEC,” the company stated in its report.

Growing institutional demand has also likely contributed to the current XRP rally. Ripple has noted that various issuers filed for exchange-traded funds based on the cryptocurrency during the fourth quarter.

The Q4 report shows that Ripple currently has 4.8 billion XRP tokens available in its wallets. On top of that, roughly 38 billion tokens are locked up in escrow wallets.