The recent resolution of the U.S. Securities and Exchange Commission (SEC) lawsuit against Ripple has sent shockwaves across the cryptocurrency market. With XRP surging 13% to $2.53, investors and analysts alike are asking a bold question: Can XRP overtake Ethereum in market capitalization? While the legal victory has reignited optimism, the path to surpassing Ethereum remains steep, requiring not just regulatory clarity but massive adoption and ecosystem growth.
The End of a Four-Year Legal Battle
The long-standing legal dispute between Ripple and the SEC officially concluded with the SEC dropping its appeal. Ripple CEO Brad Garlinghouse confirmed the outcome, declaring, “The case is over,” and framing it as a definitive win for the crypto industry. This marks the end of a four-year battle that began in December 2020, when the SEC alleged that XRP was an unregistered security.
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A pivotal 2023 ruling by a federal judge determined that XRP does not meet the definition of a security when sold to retail investors. This decision has now been solidified by the SEC’s withdrawal, effectively aligning XRP’s regulatory standing with that of Ethereum, which the SEC previously classified as a commodity in 2018.
Garlinghouse criticized the SEC’s aggressive enforcement strategy, claiming it cost XRP investors an estimated $15 billion in lost value. “The SEC wasn’t seeking justice—they were seeking to win a case at any cost,” he said. The outcome sets a crucial precedent for how digital assets may be regulated moving forward, potentially paving the way for clearer guidelines in the U.S. crypto market.
Market Reaction and Investor Confidence
The immediate market reaction has been overwhelmingly positive. XRP’s price jumped to $2.53, reflecting renewed investor confidence and speculative momentum. According to CoinMarketCap, XRP now holds a circulating market cap of approximately $146 billion, while Ethereum maintains a significantly larger cap of $246 billion.
Despite this gap, some metrics suggest growing momentum behind XRP. Notably, its fully diluted valuation (FDV)—which accounts for all tokens once fully issued—has briefly surpassed Ethereum’s in certain market conditions. However, circulating market cap remains the more accurate benchmark for real-time valuation comparisons.
Sid Powell, CEO of Maple Finance, a decentralized finance platform managing $700 million in assets, views the SEC’s decision as a strong catalyst for XRP’s price and broader crypto innovation in the U.S.
“The SEC win is positive for the price of XRP and signals a more cooperative and pro-innovation regulatory environment,” Powell stated. He believes institutional investors may have already priced in the news, but retail traders could drive short-term price increases.
XRP vs. Ethereum: A Fundamental Comparison
While price movements capture headlines, long-term dominance depends on ecosystem strength, utility, and adoption.
Ethereum continues to dominate the decentralized finance (DeFi) space, hosting over 60% of the sector’s total value locked (TVL), which exceeds $114 billion. It powers smart contracts, NFTs, and thousands of dApps, making it the backbone of Web3 innovation.
In contrast, Ripple’s primary use case revolves around cross-border payments through its On-Demand Liquidity (ODL) service. Ripple’s 2024 annual report revealed that ODL processed $30 billion in transaction volume last year, with major partners including Standard Chartered Bank and MoneyGram.
Ryan Lee, Chief Analyst at Bitget Research, acknowledges the progress but remains cautious about a sustained market cap flip.
“XRP briefly overtook Ethereum in January 2018 when it hit $3.84,” Lee noted. “But Ethereum’s fundamentals—its developer activity, DeFi dominance, and ecosystem maturity—make a lasting flip highly unlikely without explosive, widespread adoption of XRP.”
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Expert Outlook: Is an XRP Flip Possible?
Most experts agree that while XRP has momentum, overtaking Ethereum requires more than legal clarity.
Blake Jeong, Co-CEO of IOST, sees the lawsuit resolution as a sign of potential regulatory softening across the industry. However, he cautions that “XRP flipping Ethereum is still a long way off,” especially as Ethereum also gained following the announcement.
Slava Demchuk, CEO of AMLBot, underscores the scale of the challenge: “It takes more than a legal victory to flip ETH. ETH has a strong ecosystem—total TVL is over $114 billion—and the market cap gap is around $100 billion.”
Demchuk predicts XRP could reach $3 to $3.50 in price but doubts it will go higher in the near term. He cites market correction trends and a Fear & Greed Index reading of 20—indicating extreme fear—as limiting factors for aggressive bullish momentum.
Core Keywords
- XRP
- Ethereum
- SEC lawsuit
- market cap
- Ripple
- cryptocurrency regulation
- On-Demand Liquidity
- DeFi
Frequently Asked Questions
Q: Why did the SEC drop the lawsuit against Ripple?
A: The SEC dropped its appeal after a federal court previously ruled that XRP is not an unregistered security when sold to retail investors. The decision aligns with evolving regulatory interpretations of digital assets.
Q: Can XRP ever surpass Ethereum in market cap?
A: While possible in speculative scenarios, it would require unprecedented adoption of Ripple’s ODL service and significant expansion beyond payments into broader blockchain use cases like DeFi and smart contracts.
Q: Is XRP considered a security?
A: No. A 2023 federal ruling determined that XRP does not meet the legal definition of a security in most retail sales contexts, a position reinforced by the SEC’s withdrawal.
Q: What is Ripple’s On-Demand Liquidity (ODL)?
A: ODL is a blockchain-based solution that enables instant, low-cost cross-border payments using XRP as a bridge currency, reducing reliance on pre-funded nostro accounts.
Q: How does Ethereum’s ecosystem compare to Ripple’s?
A: Ethereum supports smart contracts, DeFi, NFTs, and dApps with over $114 billion in TVL. Ripple focuses on financial infrastructure and cross-border settlements via ODL.
Q: What’s next for XRP after the legal win?
A: Increased institutional interest, potential relisting on major exchanges, and expanded use in global payments are expected. Regulatory clarity may also encourage new product development.
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Final Thoughts
The conclusion of the SEC’s case against Ripple marks a watershed moment for cryptocurrency regulation in the United States. While XRP’s 13% surge reflects renewed optimism, surpassing Ethereum remains a monumental challenge—one that depends not just on price but on ecosystem growth, developer activity, and real-world utility.
For now, XRP’s victory is regulatory and psychological. The real test lies ahead: translating legal clarity into scalable innovation that can compete with Ethereum’s entrenched dominance.