XRP Overtakes Tether to Become Third-Largest Cryptocurrency

Ripple’s XRP has surpassed Tether (USDT) to become the third-largest cryptocurrency by market capitalization amid uncertainty surrounding the stablecoin’s future in Europe as MiCA regulations take effect.

XRP has climbed 1.5% in the past 24 hours and 13.1% over the past week, reaching $2.44 with a market capitalization of around $140 billion, according to CoinGecko. The cryptocurrency now trails behind Bitcoin and Ethereum, valued at $1.3 trillion and $427 billion, respectively.

In contrast, USDT's market capitalization has fallen 1.4% over the past seven days, dropping from around $140 billion to $137 billion. This dip follows growing concerns about USDT's future in Europe after MiCA regulations took effect this week.

While MiCA aims to provide a consistent legal framework across EU member states, it also highlights the broader challenges the crypto industry faces as regulations evolve. This is particularly evident as Coinbase preemptively delisted USDT in Europe to avoid potential complications with MiCA, experts previously told The Defiant this week.

Stablecoin Wars Heat Up

Experts believe another factor contributing to the decline of USDT, which currently accounts for 67% of all stablecoin trading volume, is the growing popularity of other stablecoins.

Danny Gazit, Managing Director of Hype, told The Defiant, "USDT’s lunch is being eaten up by new yield-bearing stablecoins, like Ethena with their delta-neutral model, or Ondo and others with their RWA-backed model, where users get yield for holding it."

He noted that platforms like Coinbase also offer yield for holding USDC, and with tokens like Ethena’s USDe becoming trading pairs on major exchanges like Bybit, the demand for USDT is declining.

“Add that to the continued secrecy of where its funds sit to keep the peg, and you have a recipe for a declining asset,” he said. “I wouldn’t say XRP is flipping it – that’s just where it is. Wouldn’t be surprised to see Solana (SOL) flip it next.”

This isn’t the first time XRP has flipped USDT in market cap – the Ripple-linked crypto overtook both the stablecoin and SOL on Dec. 1, 2024, when it climbed past $2 for the first time in almost seven years.