What can you say about a cryptocurrency that shows a meteoric rise, surging more than 80 percent in a day? That maybe … you wished you had some in hand?
Beyond that, we’re talking about cryptocurrencies, so the question must be posed, as always, when separating hope from hype: Is it different this time? That means looking into not just “what” happened, but also “why” it happened.
A bit about what happened. XRP, which is among the worst performers in the crypto space, jumped the aforementioned 80 percent. That may seem like a lot, but then consider the fact that the intraday zenith was around 77 cents and the crypto was, at its nadir, down 90 percent from previous highs of $3.60. There’s a lot of XRP out there, which in turn means the market cap for the crypto is now about $26 billion, and which means it is the second weightiest crypto, by market cap, behind the marquee name bitcoin and ahead of Ethereum.
One happy holder, likely, has been Ripple, which has in its portfolio the bulk of XRP – 60 billion XRP, in fact.
What was behind the move? New products, naturally – or at least rumors thereof, centered on xRapid, which is a crypto service.
Appearing on CNBC, Sagar Sarbhai, who heads regulatory relations for the firm tied to Asia Pacific and the Middle East, said that “I am very confident that in the next month or so, you will see some good news coming in where we launch the product live in production.” That prediction, which came on Monday (Sept. 17), sparked an upward march that saw a frenzied uptrend on Friday (Sept. 21), finishing the week up more than 140 percent all told.
Ripple (again, Ripple is the company, XRP is the crypto, xRapid is the service) has said that xRapid is a “bridge” that can streamline cross-border transactions and transactions done between currencies.
As an aside: So many suffixes to “x” – so little time to “x”plain.
The hint at xRapid’s adoption would come in the wake of xCurrent’s place within the financial services pantheon, and where that blockchain offering is being used in partnerships with about 120 banks. As has been noted in this space, xCurrent is being used in partnership (and to settle international payments) with companies such as Western Union and MoneyGram.
As for further inroads for xCurrent, PNC said this week it would use it for cross-border activity.
So, adoption of an existing product with hints of demand for a new one … and thus, a crypto skyrockets. As noted in Cointelegraph.com, getting traction in xRapid (which uses XRP) comes from getting traction in xCurrent.
The company has said that xRapid can help lower transaction costs done between fiat currencies by as much as 70 percent, and can lower capital requirements that banks must embrace in order to stay liquid. The platform already has had a test run with transactions between Mexico and the U.S., transacting in minutes rather than the few days it can take using traditional methods. Additionally, last month, Ripple said it partnered with a trio of crypto exchanges to bring xRapid to bear on transactions between dollars and both Mexican and Philippine pesos.
All of this may stand separately from the debate as to whether XRP is to be classified as a security by regulators, amid ongoing lawsuits. As recounted via CoinTelegraph, management has said that holders do not get a “shareholder” position when they get ahold of XRP tokens, and some precedent exists as seen in other countries, where, for example, Australia and Thailand have said that XRP is indeed a commodity.
One wrinkle here, or ripple, if you will, is that Ripple seeks to work with major stakeholders in financial services – and as such, Brad Garlinghouse, Ripple CEO, told CoinTelegraph earlier in the year, that “we were, from the beginning, really looking at how we work with governments, how we work with banks. And I think some in the crypto community have been very much, ‘How do we destroy the government. How do we circumvent banks?’” That’s a fundamental difference in go-to-market strategy that bears watching.