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Welcome back to 0xResearch. Here's what we’ve got for you today:

• XRP moons

• Chart of the Day: USDe hitting all-time highs

• Listen & Read: The race to buy bitcoin

XRP’s meteoric rise

XRP’s stunning 380% rally in the past month has catapulted it into the crypto spotlight. It has not only flipped solana (SOL) in market capitalization, but also Tether (USDT) today. With a market cap already at all-time highs, and now a fully diluted valuation (FDV) twice that of SOL, XRP’s ascent reflects a mix of regulatory clarity, network adoption and speculative fervor.

Political winds and market sentiment

The conclusion of Ripple Labs' protracted legal battle with the US SEC is one driver of XRP’s explosive growth. After years of uncertainty, the $125 million penalty imposed was far below the SEC’s initial $2 billion demand, removing a massive overhang on XRP and allowing institutional and retail investors to re-enter the market with confidence.

The significance of XRP’s legal victory transcends its price action, according to attorney John E. Deaton. Deaton is a prominent advocate for XRP holders who sued the SEC over its 2020 enforcement action. He referred to the SEC’s claim that all XRP tokens were illegal, regardless of their use case or the circumstances under which they were acquired, unprecedented “gross overreach.”

The US election has also played a role in XRP’s ascent. Trump’s victory has been interpreted as a signal not only for potentially more favorable cryptocurrency regulations, but also toward specifically favoring “homegrown” networks, initially launched by US companies.

That’s helped drive bids in similar stars of prior cycles.

There’s also a nostalgia factor, says Mena Theodorou, co-founder at crypto exchange Coinstash.

“The resurgence of many of these older coins highlights the muscle memory of retail traders, who likely got their first exposure to the crypto markets through these coins and are now returning to their favourites as they re-enter the current bull market,” Theodorou told Blockworks.

The result is that, for many, XRP represents a “comeback story,” building momentum through both narrative and a bit of substance.

The rise of XRP memecoins

Another more recent factor in XRP’s expansion is the proliferation of memecoins on the XRP Ledger. Tokens such as DROP, SIGMA and RPLS have sparked interest among the gambling crowd (if they can figure out how to use the chain).

Low transaction costs and high throughput are available in every ecosystem these days, so this could be a temporary rotation play. Memecoins have a penchant to attract retail investors, but meme trading volumes on XRPL are a modest $78 million over the past 24 hours.

ETF speculation

Beyond memecoins and political tailwinds, speculation around the approval of XRP-focused ETFs is one final driver. As Bloomberg’s Eric Balchunas notes, the introduction of ETFs would likely “open the floodgates” for institutional capital. Newfound regulatory clarity has also positioned XRP as a viable alternative to Solana and Ethereum for institutional adoption simply because of its size, even as few in the technical community take it seriously.

XRP’s price action reflects this optimism, with the market pricing in a high probability of approval given recent developments.

Ripple CEO Brad Garlinghouse, for his part, has described an ETF as “inevitable.”

The crypto asset XRP has already attracted attention from firms like Bitwise and 21Shares, whose filings for ETFs could further legitimize and amplify XRP’s appeal to institutional investors. The SEC’s initial deadlines for a decision on the ETF filings are in May and June next year, respectively.

As the third-largest crypto asset, XRP is impossible to ignore. But whether it can sustain its newfound favor, however, will depend on its ability to translate hype into lasting adoption.

— Macauley Peterson (X: @yeluacaM | Farcaster: @Macauley

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Enter the Unlimited Era: Instant Market Creation, Automatic Liquidity.

USDe is at all-time highs:

USDe supply is surging to all-time highs of $4.47 billion as of today.

This comes amid discussions in Ethena governance to redistribute protocol revenues to ENA token holders. As of the latest round of discussions, Ethena may flip on the fee switch under three criteria:

• USDE’s circulating supply reaches $6 billion. For context, its main competitor, Sky, currently has $5.65 billion in circulating supply across DAI and USDS.

• Protocol revenue reaches $250 million (currently $166 million).

• USDe is adopted on at least four out of five CEXs by derivative volumes.

Assuming Ethena sustains its past week’s growth rate and revenue growth, USDE supply will reach $6 billion in three weeks, and protocol revenue will reach $250 million in five weeks.

Its projected growth rate seems like a stretch, yet it’s not quite impossible. Ethena’s recent spike in USDe growth has largely been driven by favourable staking yields. sUSDe staking rates are currently 29% on Ethena’s official dashboard, with estimates of real rates somewhere between 21% to 27%. Even on the lower end, these yields are still outpacing “safer” sources of staking yield on centralized exchanges or Lido.

USDE’s high yields are currently driven by positive funding rates on CEXs, which is in turn driven by the rising tide of the bull market when most investors are positioned long.

In recent months, Ethena has also pursued several favorable key strategic initiatives. These include bridging USDe to the Solana ecosystem using LayerZero’s OFT standard, onboarding SOL as a backing asset for USDe, the introduction of the eUSD restaking token, as well as a planned launch of the Ethereal perps DEX as an L3.

— Donovan Choy (X: @donovanchoy | Farcaster: @donovan)

The race to buy bitcoin

What is the significance of BlackRock adopting bitcoin?

Roland (Mechanism Capital): Nuclear weapons taught us about the negative feedback loop of mutually assured destruction — if one attacks, we all die. BlackRock, as a highly America-aligned entity, is the opposite of that. They create a positive feedback loop. Whoever adopts the most bitcoin wins. If this kind of competition begins in the next few years, we’re going to see every nation-state accumulating as much bitcoin as possible.

Has crypto markets moved away from bad high FDV launches?

Matt (Intuition): A better framing is around flows, i.e. demand and supply. Post-FTX, there was far greater sell pressure than buy pressure. But with bitcoin at new highs now, retail investors are coming in and buy pressure is greater. There are no material sellers until the end of the cycle, plus these tokens are listed everywhere with high liquidity and good market makers that enable leveraged trades. Plus, the tech on some of these tokens is actually great.

Where are we in this cycle?

Roland (Mechanism Capital): Most cycles have been identical in terms of timing. Every single time someone tells me this cycle is different, they’ve been wrong. Crypto cycles tend to have a double wave kind of momentum where they top twice in April or November, so I’d be cautious going forward to March, April and toward the end of 2025. We may have a double top next year in April and November. I wouldn’t believe in a super-cycle for any altcoin, agent coin or memecoin that’s promoted as a long-term hold.

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• Libra, Meta's payments-focused blockchain, faced years of regulatory delays despite addressing concerns, according to project head David Marcus. Federal Reserve support was halted after Treasury Secretary Janet Yellen reportedly warned Chair Jerome Powell of "political suicide."