XRP Closes in on Ethereum… Will the No. 2 Spot by Market Cap Change Hands?

▲ Ethereum (ETH), XRP (XRP) / ChatGPT-generated image

XRP is rapidly narrowing its market capitalization gap with Ethereum, signaling a potential reshuffling of rankings in the cryptocurrency market.

According to crypto media outlet The Crypto Basic on February 20 (local time), XRP would need to rise approximately 173% in market capitalization from its current level to overtake Ethereum’s position as the second-largest cryptocurrency by market cap. Despite a broader market correction across digital assets, XRP has demonstrated strong support and successfully reduced its gap with Ethereum. XRP’s market capitalization is currently estimated at around $78.7 billion, drawing significant market attention.

This competition for the top altcoin position, excluding Bitcoin (BTC), suggests the possibility of a so-called “flippening.” While Ethereum has been moving sideways after encountering technical resistance, XRP has posted a sharp increase in market capitalization, fueled by regulatory changes in the United States and inflows from institutional investors. Ethereum’s market capitalization remains around $215.4 billion, meaning XRP would require a substantial additional rally from its current price to surpass it.

Regulatory clarity is considered XRP’s most powerful advantage. Since Paul Atkins assumed the role of Chair of the U.S. Securities and Exchange Commission, crypto-friendly policies have been introduced, accelerating XRP’s integration into the traditional financial system. Chair Atkins has acknowledged the innovative value of digital assets and has taken the lead in reducing regulatory uncertainty, elevating XRP beyond a mere investment vehicle to an emerging practical payment asset.

Investor sentiment indicators also show diverging trends between the two assets. According to on-chain data from Santiment, XRP’s social bullish sentiment recently reached a five-week high, while Ethereum has seen relatively lower levels of interest. Analysts note that a potential approval of a spot XRP ETF and broader adoption by U.S. banks could make a 173% increase within reach.

The narrowing market capitalization gap is expected to symbolize a shift in power within the digital asset market. A scenario in which XRP overtakes Ethereum could be interpreted not merely as a change in rankings but as a victory for utility-based financial tokens. Market participants are closely watching for a technical breakout in XRP and whether Ethereum can defend its position, seeking opportunities to rebalance their portfolios.

Disclaimer: This article is for investment reference only and the publisher is not responsible for any losses incurred based on it. The content should be interpreted for informational purposes only.