Key Takeaways

XRP has surged over 31% in January 2026, becoming the third-largest cryptocurrency by market value.
It was designed specifically for cross-border settlements, in contrast to Bitcoin and Ethereum.
Three main factors have contributed to XRP's recent popularity: the resolution of its legal battle with the SEC, the influx of investments into XRP ETFs, and concerns about MSCI decisions.
Ripple is actively expanding its services through acquisitions but remains cautious due to ongoing regulatory developments.

XRP the hottest crypto trade of 2026

While Bitcoin and Ethereum are facing distinct challenges, XRP has skyrocketed over 31% in early January. This increase has allowed it to surpass Binance Coin (BNB) and claim the position of the third-largest cryptocurrency by market capitalization. Investors are left questioning whether this surge is merely hype or if XRP is finally demonstrating real utility.

XRP: The Bridge Between Currencies

According to CNBC’s MacKenzie Sigalos, XRP was specifically created for cross-border settlement, unlike Bitcoin (BTC) or Ethereum (ETH). In traditional banking, converting currencies like USD to JPY can take days and requires banks to hold significant amounts of pre-funded capital in foreign accounts. XRP serves as a bridge asset, facilitating these transactions in mere seconds.

Sigalos further explains, “Unlike stablecoins, which are tokenized dollars, XRP aims to be the exchange layer that transfers value between currencies.”

Why the Current Hype?

The rising interest in XRP is driven by three key factors that came together at the start of 2026.

Legal Resolution: The prolonged legal battle between Ripple and the SEC concluded in August 2025, with both parties dropping appeals and Ripple paying a final penalty of $125 million. This resolution gives XRP a clean status in the U.S. that few other altcoins possess.
ETF Impact: As of January 7th, Spot XRP ETFs have seen a cumulative total net inflow of $1.25 billion, reflecting strong investor interest.
MSCI Hedge: Concerns about a potential MSCI decision regarding “Digital Asset Treasury Companies” have made investors uneasy. Fears of forced selling in Bitcoin-heavy stocks have prompted some traders to shift their investments into XRP.

Real Adoption vs. Regulatory Developments

Ripple is strengthening its full-stack financial services by acquiring firms like Metaco and Standard Custody. However, caution is warranted.

Global regulators are still in the process of developing the “rules of the road” for crypto. As for XRP’s current pricing, it was trading at $2.23 after a decline of 4.77% in the past 24 hours, according to CoinMarketCap. Additionally, the U.S. Crypto Market Infrastructure Bill, which aims to clarify digital asset regulations, is currently stalled in the Senate.

As interest in XRP grows, it remains to be seen whether it can maintain its third position or face challenges in the upcoming months.

Final Thoughts

Investors are closely watching XRP as it navigates through regulatory challenges and market dynamics. The developments in 2026 could set the tone for its future in the cryptocurrency landscape.