In a dramatic shift within the cryptocurrency landscape, XRP has reemerged as the third-largest digital asset by market capitalization, surpassing the long-dominant stablecoin Tether (USDT). This milestone, achieved in early January 2025, marks a significant comeback for the Ripple-associated token and underscores renewed investor confidence amid a broader market uptick.
XRP Surpasses USDT in Market Valuation
As of January 3, 2025, XRP reclaimed the third position in the crypto market hierarchy, trailing only Bitcoin (BTC) and Ethereum (ETH). At 11:00 AM Eastern Time, XRP was trading at $2.46—a 1.5% increase against the U.S. dollar—and boasted a total market cap of **$141.06 billion**, edging past USDT’s $137.08 billion.
This shift is particularly notable given USDT’s usual dominance as the most widely used stablecoin. On December 16, 2024, USDT briefly surged past the $140 billion mark, but its valuation has since declined by nearly $3 billion. In contrast, XRP’s price momentum has been fueled by organic market performance rather than pegged stability.
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Price Momentum and Investor Sentiment Drive XRP Growth
Unlike stablecoins, which maintain value relative to fiat currencies, XRP’s market cap is directly influenced by price fluctuations and trading volume. Over a two-week period, XRP appreciated by 13.1%, with an extraordinary 390% gain over the past 90 days—one of the most impressive rallies among major digital assets.
Currently, XRP ranks sixth globally in terms of trading volume, with $6.08 billion in daily transactions across major exchanges. Its primary trading pairs include USDT, KRW (South Korean Won), USD, USDC, and FDUSD, reflecting strong international demand—particularly from Asian markets.
The surge has also triggered derivative market movements. In just 24 hours, approximately $1.78 million in leveraged positions were liquidated, primarily on long-side bets as volatility increased. Such activity indicates growing speculative interest and short-term trading momentum around XRP.
Strategic Wallet Movement Sparks Market Attention
A key catalyst behind the renewed attention on XRP was Ripple Labs’ movement of 1 billion XRP tokens from a locked escrow account into its operational wallet on January 1, 2025. While Ripple has consistently maintained that these releases are part of a pre-announced supply management strategy, the timing coincided with rising market optimism.
Historically, large wallet transfers have triggered both fear and excitement in the community—concerns about potential sell pressure versus confidence in strategic deployment. However, in this instance, the market responded positively, interpreting the move as a signal of readiness for expanded use cases and liquidity deployment.
Why XRP’s Resurgence Matters in 2025
XRP’s return to the top three is more than just a ranking change—it reflects deeper trends shaping the digital asset ecosystem:
- Increased utility perception: Despite ongoing regulatory scrutiny in certain jurisdictions, XRP continues to be adopted for cross-border payments through RippleNet and its On-Demand Liquidity (ODL) solution.
- Market rotation dynamics: As Bitcoin and Ethereum stabilize post-halving cycle expectations, investors are rotating into high-potential altcoins with strong fundamentals.
- Macro sentiment improvement: Broader financial markets showed renewed risk appetite in early 2025, with declining inflation signals and potential rate cuts boosting speculative assets like cryptocurrencies.
The Role of Stablecoins vs. Volatile Assets
The temporary displacement of USDT highlights an important distinction: while stablecoins serve as transactional anchors and liquidity providers, their market caps can contract during periods of reduced trading activity or de-pegging fears. In contrast, assets like XRP benefit from bullish sentiment cycles and narrative-driven rallies.
That said, USDT remains critical to crypto infrastructure. It facilitates seamless trading pairs, acts as a safe haven during volatility, and supports decentralized finance (DeFi) protocols worldwide. XRP’s brief lead does not diminish USDT’s functional dominance but instead emphasizes how dynamic valuations can shift based on investor behavior.
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Frequently Asked Questions (FAQ)
Q: Is XRP officially ranked third in cryptocurrency by market cap?
A: As of early January 2025, yes—XRP briefly surpassed Tether (USDT) in total market capitalization. However, rankings fluctuate daily based on price movements and circulating supply dynamics.
Q: What caused XRP’s price to rise so sharply in late 2024 and early 2025?
A: A combination of factors contributed: positive sentiment following regulatory clarity in key markets, increased adoption of Ripple’s payment solutions, strong technical performance, and broader altcoin rotation among traders.
Q: Does Ripple selling XRP from escrow affect the price?
A: While Ripple regularly releases XRP from escrow as part of its transparent supply schedule, actual sales depend on business needs. Markets tend to react more to perceived sell pressure than actual volume, though recent data shows minimal dumping.
Q: Can XRP maintain its top-three position long-term?
A: Sustaining third place will depend on continued adoption, regulatory outcomes, and overall crypto market conditions. Given the size gap between BTC/ETH and other assets, holding rank beyond short-term surges is challenging but possible during strong bull phases.
Q: How does trading volume impact XRP’s market cap ranking?
A: High trading volume signals strong demand and liquidity, which attracts institutional and retail investors alike. With over $6 billion in daily volume, XRP maintains visibility and tradability across global platforms.
Looking Ahead: What’s Next for XRP?
As we progress through 2025, XRP’s trajectory will likely hinge on several key developments:
- Expansion of RippleNet partnerships with banks and financial institutions
- Regulatory clarity in major economies like the United States and European Union
- Integration into new DeFi and tokenization projects
- Continued performance relative to competing Layer-1 blockchains
While surpassing USDT may be temporary—given the stablecoin’s foundational role—the fact that a volatile asset like XRP can achieve such a feat speaks volumes about evolving market dynamics.
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Conclusion
XRP’s reclamation of the third-largest market cap position in early 2025 is a testament to its resilience, community support, and enduring relevance in the global payments conversation. Though subject to volatility and external pressures, its recent performance demonstrates that even mature altcoins can experience powerful resurgence under favorable conditions.
For investors and observers alike, this shift offers valuable insight into how sentiment, technology adoption, and macroeconomic forces intersect in the digital asset space. As the year unfolds, all eyes will be on whether XRP can consolidate gains or if this is a flash-in-the-pan rally amid a broader crypto awakening.
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