24 February, 2024

XRP Poised to Topple Tether’s Stablecoin Dominance in Next Bull Cycle

7 months ago

01 Nov, 2023

The epic 2017 crypto bull run was a defining moment for the blockchain industry. Driven by retail investor FOMO and speculation, prices for top cryptocurrencies like Bitcoin and Ethereum soared to unimaginable heights before crashing down in 2018’s enduring bear market.  

XRP, in particular, was one of the biggest beneficiaries of this hype cycle. At the start of 2017, XRP was trading at just a fraction of a penny, with a market cap of around $200 million. By the end of the year, XRP had shot up to highs of $3.50, delivering staggering returns of over 30,000% for investors who got in early enough. XRP’s market cap ballooned to over $130 billion, briefly displacing Ethereum as the 2nd largest cryptocurrency.

Tether (USDT), however, was unfazed by this turbulence. As a stablecoin pegged 1:1 to the U.S. dollar, its price floated steadily around $1 throughout 2017 and 2018. However, USDT saw its market cap swell from around $10 million to nearly $2 billion by the end of 2017 as traders flocked to the relative safety of stablecoins amidst the market mania. 

When the crypto winter arrived in 2018, the speculators fled, and XRP came crashing back down, declining nearly 90% within a year. But while XRP languished, USDT’s dominance only grew. Its market cap passed $10 billion in 2020 as it became the reserve trading pair for most cryptocurrency exchanges. 

XRPUSD is currently trading at $0.70342, showing a decline of 1.46% in the last 24 hours. The daily chart indicates a bearish sentiment, with XRP struggling to regain bullish momentum. The cryptocurrency faces resistance at $0.71379, while support Could be seen at $0.70232.

Source: TradingView

XRP is ranked fourth on CoinMarketCap, with a market cap of $37.3 billion and a trading volume of $1.49 billion, indicating traders’ continued interest in the coin.

Now, looking ahead to the next bull run, the possibility of XRP overtaking USDT’s market cap hinges on just how frenzied the next boom cycle is. For XRP to flip USDT, its current market cap of around $37 billion would need to surpass USDT’s ~$83 billion valuation.

This would require massive gains of 10x or more to propel XRP into the $5-10 range. But given XRP’s history of exponential leaps, like its 30,000% explosion in 2017, this kind of parabolic ascent can’t be ruled out if conditions align perfectly.

XRP’s expanding real-world use for cross-border payments through Ripple’s partnerships is fueling a potential surge. If XRP gains meaningful adoption on top of speculative mania, it could have the momentum to temporarily unseat USDT and take the coveted 3rd spot.

However, USDT has advantages in its stability, liquidity, and entrenchment in crypto trading. Unless demand for stablecoins evaporates, USDT’s market cap would likely also rise substantially as new capital flows into cryptocurrency. 

Outcompeting USDT in the long term seems less likely without dramatically scaling up utility and real-world traction. For now, USDT remains the stalwart of the crypto markets, while XRP hopes to regain its former glory.
Some analysts believe history may repeat itself and boost XRP back into the top ranks during the next bull run. Analyst Del Crxpto tweeted, “Next bull run will see $SHIB return to the top 5 & $XRP return to the top 3.” He further reiterated that history is the “best predictor”.