XRP’s Regulatory Horizon: The CLARITY Act and the Path to Commodity Status

As of December 2025, the proposed CLARITY Act stands as a pivotal piece of legislation poised to redefine the regulatory landscape for digital assets, with profound implications for Ripple and its native token, XRP. The Act's core innovation is the introduction of clear, quantifiable criteria for classifying cryptocurrencies, most notably a 20% supply concentration threshold. This benchmark is designed to objectively assess the decentralization of a digital asset. For XRP, which has long navigated the complex and often contentious debate over its status as a security, this legislation offers a potential pathway to regulatory certainty. By establishing that any digital asset whose largest holder controls less than 20% of the total supply may be deemed sufficiently decentralized, the CLARITY Act provides a concrete standard. Ripple's compliance with this specific concentration benchmark could be the decisive factor in cementing XRP's legal classification as a commodity, akin to Bitcoin and Ethereum, rather than a security under U.S. law. Such a reclassification would not only resolve years of legal ambiguity but also unlock significant institutional adoption, as it would alleviate the regulatory overhead and compliance burdens associated with securities. Market participants, including exchanges, institutional investors, and developers within the XRP ecosystem, are closely monitoring the Act's progress. A favorable outcome is anticipated to bolster investor confidence, enhance liquidity, and potentially catalyze a revaluation of XRP's market position. The Act represents a move towards a more structured and predictable regulatory environment, which is crucial for the maturation of the broader cryptocurrency sector. For Ripple, successfully navigating this regulatory shift could validate its longstanding business model and partnerships, particularly in cross-border payments, by removing a major legal overhang. The coming months will be critical as legislative details are finalized and applied, setting a precedent that will likely influence the regulatory treatment of numerous other digital assets beyond XRP.

CLARITY Act Implications for Ripple and XRP

The proposed CLARITY Act is reshaping regulatory expectations for cryptocurrencies, with significant implications for Ripple and XRP. The legislation introduces clear criteria for classifying digital assets, including a 20% supply concentration threshold to determine decentralization. Ripple's compliance with this benchmark could cement XRP's status as a commodity rather than a security.

Market participants are closely monitoring the Act's progress, as its framework may set a precedent for how mature blockchains are evaluated. A recent analysis by an XRP community member underscores the importance of this threshold, suggesting it could pave the way for broader adoption.

XRP Price Prediction: Breakdown Below Key Support Level Sparks Bearish Concerns

XRP has tumbled 4.3% in the past 24 hours, breaching the critical $2 support level as crypto markets face broad-based selling pressure. The breakdown signals potential capitulation among bulls, with long liquidations surging unexpectedly.

Trading volumes doubled to $3.9 billion during the sell-off, reflecting intense downward momentum. Despite the weakness, institutional interest persists—XRP-linked ETFs have recorded 21 consecutive days of net inflows, suggesting long-term holders remain committed.

Technical charts show the next crucial support at $1.86. A failure to hold this level could trigger a 10% decline toward October lows NEAR $1.58. Market participants now watch whether institutional demand can offset deteriorating technicals.

XRP’s Path to $5.85 & $8.76: Analyst Predicts ‘Wave D’ Rally by 2026

XRP dipped to $1.88 early Wednesday, testing a critical support level as traders debated whether the cryptocurrency has entered a bear market. The token now hovers near $1.92, with failure to reclaim $2.00 potentially signaling further downside.

Pseudonymous analyst Dark Defender contends this slump aligns with a predicted 'Wave C' decline—a prelude to a bullish 'Wave D' phase set to begin in February 2026. The analyst forecasts XRP will then surge to between $5.85 and $8.76, citing historical pattern accuracy.

Market sentiment appears divided. While some anticipate prolonged weakness, Dark Defender asserts the narrative will shift abruptly once Bitcoin’s dominance wanes. 'We’ve tracked this since February,' the analyst noted, referencing XRP’s adherence to anticipated Elliott Wave trajectories.

XRP Whale Nets $721 Million Profit After Five-Year Dormancy

A veteran XRP investor has capitalized on the cryptocurrency's recent price action, transferring a long-held stash to realize $721 million in profits. Blockchain analytics firm Glassnode identified the transaction involving tokens dormant for 5-7 years, marking one of the largest single profit-taking events in XRP's history.

The movement triggered a visible spike in XRP's Realized Profit metric on December 11, particularly among the 5-7 year holder cohort. Such transactions from long-term holders often signal important market inflection points, as these investors typically represent the most committed segment of the asset's base.

While the destination of the transferred XRP remains unclear, the sheer scale of profit realization suggests strategic positioning by a sophisticated market participant. The event coincides with renewed institutional interest in digital assets following recent regulatory developments.