If you’ve spent any time looking at crypto charts lately, you’ve probably noticed the sea of green surrounding Ripple’s native token. It’s hard to miss. XRP is going up with a kind of momentum we haven't seen in years, and honestly, the reasons are way deeper than just "the market is doing well."
By mid-January 2026, XRP has been hovering around the $2.07 mark, after a massive early-year sprint that saw it touch $2.34. That’s a 16% jump in just the first two weeks of the year. While casual observers think it’s just another pump-and-dump, the reality on the ground—especially in the halls of Washington and the trading floors of Wall Street—tells a much more complex story.
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The "Gensler Exit" and the Regulatory Green Light
The elephant in the room has always been the SEC. But as of January 2026, that elephant has basically left the building.
The resignation of Gary Gensler, scheduled to coincide with the presidential inauguration on January 20, has acted like a massive pressure valve being released. For years, the XRP community felt like they were fighting with one hand tied behind their backs. Now, the market is pricing in a totally different reality.
Under the incoming Trump administration, the tone has shifted from "regulation by enforcement" to "how do we make the U.S. the crypto capital of the world?" We’re seeing a real, tangible push for the Digital Asset Market Clarity Act (the "Clarity Act"). This isn't just another boring piece of paper. It’s a legislative framework designed to stop the guessing games about what is or isn't a security.
Stuart Alderoty, Ripple’s Chief Legal Officer, recently made it clear that the "Gary who?" era has begun. The market agrees. When you remove the threat of a multi-billion dollar fine or a permanent ban on U.S. operations, the value of the underlying tech suddenly matters again.
Institutional Money Is No Longer "Coming"—It's Here
We used to talk about "the institutions" like they were some mythical creature that would eventually show up. Well, they’ve arrived, and they brought their checkbooks.
In late 2025, the launch of spot XRP ETFs changed the game. These funds have already sucked up over $1.2 billion in cumulative net inflows. Think about that. That’s $1.2 billion worth of XRP that is no longer being bounced around by retail day traders on Binance. It’s being locked away in regulated custody for long-term holders.
Why the Supply Squeeze Is Real
The math here is getting kinda scary for anyone who hasn't bought in yet.
- Exchange Reserves: XRP held on centralized exchanges dropped from 4 billion tokens in early 2025 to about 1.6 billion today.
- ETF Locks: Every dollar that flows into an ETF like Bitwise's or Canary Capital's effectively removes XRP from the "tradable" supply.
- The Escrow Factor: Even though Ripple released 1 billion XRP from escrow on January 1, 2026, it didn't crash the price. Why? Because the demand from new institutional players is eating up that supply faster than Ripple can release it.
Basically, we're looking at a classic supply-demand imbalance. More people want it, and there is less of it available to buy on the open market.
RLUSD and the "Plumbing" of Modern Finance
There’s a part of this story that the average person misses because it sounds too much like "boring bank stuff." But it's actually the most important part.
Ripple USD (RLUSD), their native stablecoin, has officially hit the big leagues. On January 15, 2026, Ripple announced a massive partnership with LMAX Group. This isn't some tiny crypto startup; LMAX is a global cross-asset powerhouse that handled $8.2 trillion in volume last year.
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They are integrating RLUSD as a "core collateral asset." This means big banks and brokers can use Ripple’s stablecoin to back their trades 24/7.
But wait, why does a stablecoin make XRP go up?
It’s all about the "bridge." XRP is the liquidity layer. When money moves through the XRP Ledger (XRPL) via RLUSD, XRP is the grease that keeps the wheels turning. As RLUSD scales—and it’s already a top 5 dollar-backed stablecoin—the organic demand for XRP as a settlement tool scales with it.
The Evernorth IPO Speculation
Here is something most people are getting wrong: Ripple itself isn't going public yet. Monica Long, Ripple's President, recently told Bloomberg their balance sheet is too strong to bother with an IPO right now. They don't need the money.
However, an XRP-linked firm called Evernorth Holdings is heading to the Nasdaq this quarter. They hold roughly 388 million XRP tokens. The fact that a company with that much XRP exposure is merging with a SPAC (Armada Acquisition Corp II) to list on a major U.S. exchange is a massive signal of legitimacy.
It’s the kind of "Wall Street validation" that makes traditional investors feel safe. If the Nasdaq is okay with an XRP-heavy treasury, then the "XRP is a scam" narrative is officially dead.
What Could Go Wrong? (The Reality Check)
Look, nothing goes up forever in a straight line. XRP has a history of "heartbreak rallies" where it gains 50% and then bleeds out over six months.
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We also have to talk about the market cap. At $2.00, XRP is already a giant. For it to hit the $100 price targets you see on "Crypto Twitter," its market cap would have to exceed $6 trillion. That’s more than the entire U.S. banking system's value.
Is that realistic in 2026? Probably not.
But could it hit $3 or $4? Analysts like Geoffrey Kendrick at Standard Chartered think $8 is possible by the end of the year if the "Clarity Act" passes and the Federal Reserve starts looking at the XRPL for its own liquidity needs.
Actionable Steps for Navigating the XRP Surge
If you’re watching the price action and wondering if you missed the boat, you need a plan that isn't based on FOMO (Fear Of Missing Out).
- Watch the $2.50 Resistance: XRP has struggled to maintain momentum past this level in the past. If it breaks $2.50 with high volume, it could trigger a "short squeeze" that sends it toward $3.40 (the 2025 high).
- Monitor the "Clarity Act" Progress: This is the real catalyst. If the Senate marks up this bill in late January as expected, the "regulatory risk" discount on XRP will vanish entirely.
- Check Exchange Balances: Use tools like CryptoQuant to see if XRP is still flowing off exchanges. If that trend reverses and people start dumping tokens back onto exchanges, the rally might be cooling off.
- Diversify Your Entry: Don't go "all in" at the peak of a 20% green candle. The "January effect" is strong, but macro uncertainty still exists.
The bottom line is that XRP isn't going up because of a meme or a tweet. It’s going up because the legal, institutional, and technical stars have finally aligned after five years of total darkness.
Stay focused on the supply data and the D.C. headlines. That’s where the real story is.