Deniz Burunlu currently lives in London. He has a BSc Hons in Biomedical Sciences and currently studying Medicine.
Ripple’s XRP token has dropped significantly from its all-time high of $3.84, reached in January, to its current value of $0.45 (CoinMarketCap).
It should be noted in context that the crypto market as a whole has seen a significant decrease since January 2018. This downturn of the whole crypto market as a whole cannot be simply explained by any single event. A number of factors over the last few months has led to the current situation.
What is XRP?
XRP is a token created by the company Ripple. XRP is designed to be a decentralised digital asset that can be used to settle payments in only a few seconds. Additionally:
- It is considered much faster than Bitcoin, handling more than 1,500 transactions per second; plus it can be scaled to handle even more.
- XRP has considerably less transaction cost per standard transaction compared to Bitcoin.
- XRP is the token currency of the Ripple network.
- Unlike Bitcoin, which is mineable, XRP was created ("pre-mined") in a single event. There are a total of 100 billion XRP tokens.
Will XRP Go up in Price?
Here are four factors that could greatly affect the future price of XRP:
- SEC declaration on its legal status
- Listing on Coinbase
- Development and use of xRapid
- XRP use by SBI Holdings
SEC Declaration on XRP's Legal Status
The debate over whether XRP is or isn’t a security has been going on for a while and has a great effect on the price.
A number of lawsuits have accused Ripple of creating XRP as a security.
Brad Garlinghouse has explained that XRP cannot in any way represent a security, because XRP would still exist on the xRapid network even if the Ripple foundation ceased to exist.
The final decision on whether XRP is a security or not rests with the SEC.
The SEC decision could make or break XRP. A positive verdict could send the price of XRP rocketing, while a negative verdict will most certainly be disastrous to the value of XRP.
Listing on Coinbase
Coinbase, the largest cryptocurrency exchange in the U.S, has recently announced that it is considering adding five new tokens to its platform.
The five digital coins include Cardano, Basic Attention Token, stellar Lumens, Zcash, and Ox.
After months of speculations and rumors, we still have no clear picture of whether XRP will be listed on Coinbase. Chances are that XRP will most likely stay off Coinbase until the SEC makes a decision about it.
However, some also believe XRP may not need Coinbase, as technologies like xRapid take off.
Development and Use of xRapid
xRapid uses XRP as a source of instant liquidity and a way to make the fiat transaction cheaper and quicker.
Brad Garlinghouse, Ripple’s (XRP) CEO, explained in an interview with CNBC that by the end of 2019, he expects many large institutions to be using it.
“I’ve publicly stated that by the end of this year I have every confidence that major banks will use XRapid as a liquidity tool,” Garlinghouse told CNBC in an interview.
The XRP token is publicly traded on cryptocurrency exchanges. If large institutions begin using the xRapid product, demand for XRP would theoretically rise: the large-scale transactions that would be taking place would increase the price.
XRP to Be Used by SBI Holdings
SBI will be launching a new cryptocurrency exchange, which will focus entirely on XRP. This is because the parent company of SBI Holdings has been a partner of Ripple for a number of years. Its CEO, Yoshitaka Kitao, has been quoted as being bullish on the price of XRP, predicting a price of $10.
Ripple's XRP token has a lot of potentials. Once the SEC decision is made, I believe it will rocket in price. The decision will most certainly attract new investors, as well as strengthening the faith of current holders. A positive SEC decision could also lead to Ripple being listed on Coinbase.
However, if the SEC gives a negative decision and classifies XRP as a security, prices will likely plummet.
This article is accurate and true to the best of the author’s knowledge. Content is for informational or entertainment purposes only and does not substitute for personal counsel or professional advice in business, financial, legal, or technical matters.
© 2018 Deniz Burunlu