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XRP, the cryptocurrency associated with Ripple, has reached its highest price in nearly seven years, recently surpassing $1.93. This level, last seen in January 2018 after XRP's all-time high of $3.40, highlights a remarkable recovery. Currently trading at $2.45, XRP has surged nearly 30% over the past week and boasts a 274% gain over the last 30 days. Its market capitalization now stands at $136 billion, ranking it the third-largest cryptocurrency behind Bitcoin and Ethereum.

Ripple’s monthly release of 1 billion XRP tokens, valued at $1.92 billion, occurred on Dec. 1 as part of its supply management strategy. While the move raised concerns about potential inflationary effects, XRP experienced only a modest 2.4% price dip following the release and maintained its upward trajectory. Ripple’s approach aims to create predictability in token distribution, with 37.24 billion XRP tokens still held in escrow.

The resignation of SEC Chair Gary Gensler, effective January 2025, has been a significant catalyst for XRP’s recent performance. Gensler’s tenure was marked by aggressive regulatory actions against cryptocurrency firms, particularly Ripple. His departure has sparked optimism for a more favorable regulatory environment under the incoming administration. This shift has also raised hopes for a resolution in Ripple’s long-standing legal battle with the SEC, further boosting market sentiment.

Speculation about the potential launch of an XRP-based exchange-traded fund (ETF) has contributed to the price surge. Global investment firms like WisdomTree and Bitwise have signaled interest in introducing such products, reflecting optimism about regulatory changes. Additionally, XRP’s derivatives market is witnessing record activity, with open interest soaring 37% in 24 hours to reach $3.19 billion, an all-time high.

However, analysts caution against risks associated with leveraged trading, which has been driving much of XRP’s momentum. Similar speculative surges in November led to a 17% price drop, raising concerns about potential liquidations that could trigger further volatility. Leveraged positions are particularly vulnerable to cascading sell-offs if prices fall abruptly.

Despite these risks, XRP has delivered substantial returns for long-term holders. The token’s recent performance represents a 1,420% gain from its March 2020 low of $0.127. XRP has also overtaken Solana and Tether in market capitalization, reinforcing its resurgence as a dominant player in the cryptocurrency space. While it remains 40% below its all-time high, XRP's current trajectory reflects its renewed prominence, fueled by regulatory developments, market speculation, and Ripple’s strategic initiatives.