2021 was a particularly bullish year for Ripple’s XRP and the broader crypto market. A number of the crypto majors, including Bitcoin (BTC) and Ethereum (ETH) struck new all-time highs late in the year.
Increased adoption and greater market awareness of NFTs, the metaverse and Web 3.0 drove the market cap from a January year-low $736bn to a November year high $3,009bn. The total crypto market cap stood at $2,380bn at the time of writing.
Demand for alt-coins were also on the rise with Bitcoin’s (BTC) dominance taking a hit. BTC dominance had stood at 73.63% in January before sliding to a 2021 year low 39.56% in September. BTC dominance stood at 40.1% at the time of writing.
According to CoinMarketCap, XRP is the 7th largest crypto, with a market cap of $43.77bn. XRP had sat at the number 3 spot for a significant period of time before losing ground.
The fall from the number 3 spot came in spite of XRP surging by 319% in the year. Others have simply done better, with the SEC lawsuit against Ripple Lab pinning XRP back from larger gains.
Binance Coin (BNB), now ranked 3rd by market cap, is up 1,356% for the year, with Cardano’s ADA (ranked 6th) up 691%. Solana (SOL), currently ranked 5th by market cap, is up by an impressive 12,764% for the year.
XRP Moves in 2021
In January 2021, XRP’s had fallen from a previous year high of $0.7872 to a Jan-2021 low $0.2108. Finding support from the broader market, XRP struck a 2021 year high $1.9660 in April before sliding back to $0.50 levels.
The SEC lawsuit against Ripple Lab led to the sell-off. Late in the year, however, hopes of a favorable settlement with the SEC saw XRP test resistance at $1.00.
The SEC action against Ripple Lab and two executives alleges that over $1.3bn was raised through an unregistered, ongoing digital assets securities offering. Key to the claim is that the SEC classified XRP as a security. This was in contrast to ETH. In June, the SEC had stated that ETH offers and sales are not securities transactions. The announcement supported an ETH run to an ATH $4,868 in November.
XRP’s market cap, now sitting at $43.77bn had recovered from a Jan low $10.78bn to reach a year high $83.51bn before falling back.
What’s next for Ripple’s XRP in 2022?
The markets are bullish for the year ahead. Much, however, will depend upon the outcome of two lawsuits.
A claim of bias against the SEC filed by Empower Oversight, a non-profit government watchdog, will be key. Empower Oversight claims that SEC officials were biased against Ripple Lab and XRP. A verdict in favor of Empower Oversight would give the SEC more reason to close out the claim against Ripple Lab, which should favor XRP.
Such an outcome to the claims could see XRP breakout from its January 2018 ATH $3.35. Some are talking of hitting $5.00 levels in the year. An unfavorable outcome, however, would have a devastating impact on XRP and XRP holders. While torn, the markets have been more optimistic than earlier in the year.
Aside from the outcomes of the two lawsuits, broader crypto market movements will also influence, however. A bearish year for the crypto markets could see XRP fall back to $0.50 levels. The downside risk to the broader crypto market remains greater regulatory oversight.
Source: Yahoo Finance