by David Drake
In just three days, the price of Ripple XRP surged by nearly 35% to settle at $2.20. At the time of writing this article, Ripple had a market capitalization of $85 billion, only second to Bitcoin. This spike in value has caused Ripple to rise above other cryptocurrencies and prove itself a major digital currency as well as a sound alternative to the leading cryptocurrency, Bitcoin.
Just a week ago, this cryptocurrency reached the $1 mark for the first time. Earlier this week, Ripple’s price went up on some exchanges, reaching $2.65. This earned investors, who had bought the currency at the beginning of December at $0.24, returns of up to 1,000 percent.
The rising value of Ripple is largely linked to its growing partnerships with conventional financial institutions that are keen to adopt its technology as a way of reducing transaction time and costs.
Acknowledging this, Playfold’s CEO, Marcus Vandea says, “Ripple’s value lies in its relatively unique stability and attractiveness to the banking system. If more and more institutions start to adapt to this token, it will keep rising. The current excitement around cryptocurrencies is broadening from Bitcoin to other coins, and XRP is right up there with the most popular ones. The current excitement around cryptocurrencies is broadening from Bitcoin to other coins, and XRP is right up there with the most popular ones.”
Out of all digital currencies which experienced price increments in 2017, Ripple had the highest growth. Its value has increased 350 times, from $0.0065 in January 2017 to $2.24 on December 30, 2017. Its recent price spike saw its market capitalization hit the $86 billion mark on December 30, about $20 billion ahead of Ethereum.
With more than $38 billion XRP coins in circulation, players in the cryptocurrency are beginning to raise questions concerning Ripple’s market capitalization. Shopin CEO, Eran Eyal thinks it could get a bit unrealistic further down the road considering only 40% of its coins are in circulation.
He says, “The real question of Ripple is the insane market cap. Ultimately, right now the market cap sits close to $100 billion. A person I know was discussing the possibility of Ripple going 10 times. I think one has to be a little bit realistic about the math. If Ripple goes to $1 trillion, that is practically double the size of the entire crypto market. It literally dwarfs Bitcoin, but further to that, 40% of Ripple remains unreleased.”
Though the majority of cryptocurrencies in the market focus on decentralization, Ripple remains a centralized cryptocurrency. It’s designed to facilitate instant, secure and low cost financial payments of any size across the globe. Besides being a digital currency, Ripple also serves as a protocol that bridges other currencies without discriminating against mobile minutes or other fiat or digital currencies.
Disclaimer: David Drake is on the advisory board for most of the firms mentioned or quoted in this article.