XRP Surpasses BNB as Fourth Largest Cryptocurrency; Funding Rate Increases

XRP Surpasses BNB

Payments-oriented cryptocurrency XRP has surpassed BNB token to become the fourth largest digital asset by market capitalization in the world.

As of this writing, XRP has a market capitalization of $41.44 billion, up 66% in the past 24 hours alone, according to CoinDesk data. Meanwhile, BNB’s market capitalization rose 6.5% to $40.57 billion. The price of XRP rose from 47 cents to nearly 78 cents.

Ripple Lab has won a partial victory in a protracted legal battle with the U.S. Securities and Exchange Commission (SEC) over the sale of XRP that fueled the cryptocurrency's rise.

On Thursday, the U.S. District Court for the Southern District of New York ruled that Ripple’s issuance and sale of XRP on digital asset exchanges did not constitute the issuance and sale of investment contracts alleged by the SEC.

However, the court found that Ripple violated securities laws by directly selling more than $700 million worth of XRP to institutions, hedge funds and other parties. The U.S. Securities and Exchange Commission (SEC) filed a lawsuit against Ripple in late 2020 for selling unregistered securities after Ripple sold $1.3 billion worth of XRP. Ongoing regulatory action led to several exchanges delisting XRP and put the cryptocurrency under pressure, while the broader market ended the year on a positive note.

The first part of the ruling opened the door for centralized exchanges to relist XRP. Crypto.com has already taken this step, and Gemini is considering listing XRP for spot and derivatives trading.

Meanwhile, CoinShares head of product Townsend Lansing said the second part of the ruling found XRP to be a security.

“The court found that Ripple violated securities laws, particularly with regard to direct sales to institutional investors. As a result, not only is (XRP) considered a security, but the legality of its offering is also in question,” Lansing said in an email. : “In this sale, the court confirmed that the law was indeed violated, marking a major victory for the Securities and Exchange Commission (SEC) and setting a precedent for them to take legal action against other cryptocurrencies. ".

“It’s worth noting that institutional investors who buy products directly from Ripple as potential subscribers could be the subject of class action lawsuits. This is an area to watch closely, especially when high-profile venture capitalists are involved.” Langsing added.

Traders have yet to pay attention to the second part of the verdict, as evidenced by the price surge and bullish positioning in the perpetual futures market.

Perpetual futures are similar to standard futures contracts in that they have no expiration or settlement date.

Funding rates are periodic payments of an asset between bullish long and bearish short position holders in the perpetual futures market. A positive funding rate means longs are dominant and are paying shorts to keep their positions open.

Data from Coinglass show aggregated volume-weighted perpetual futures funding rates worldwide have jumped to the highest since at least December. The open interest-weighted rates have risen to a four-month high.  

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