Ripple, the well-known cryptocurrency and blockchain foundation has been all over the news lately. With daily headlines like “XRP Has Usurped Ethereum for the Top Spot Behind Bitcoin!” and proclaiming impressive price and market capitalization milestones, even infrequent traders can see that something significant is happening for the company. This could be the beginning of a strong trend for XRP, as the products of its more centralized bent gain recognition and mainstream momentum, at a time when questions about blockchain loom large.
Founded a couple years before Ethereum as a payment solution in the same vein as Bitcoin, Ripple and its token XRP are old news to the market, but have quietly been gaining steam. Though XRP floundered with the rest of the market in the first half of 2018, it began to diverge from the broader downward trend last month in September. Many traders were surprised when the price of XRP jumped from $0.30 to $0.50 on September 21st alone, reaching a peak of $0.62 at the end of the month for an 80% gain. Measured from September 18th to 22nd, when XRP went from $0.27 to briefly touching $0.69, those on the right side of the trade took in over 150%. XRP’s market cap is currently fighting Ethereum for the second largest behind Bitcoin.
There are several reasons that XRP decided to jump now even though the company has already been making encouraging progress throughout the year. These are concerned with how progress in Ripple contrasts with blockchain’s stagnation, the upcoming Swell conference, new Ripple technology, and a newly formed group meant to give Ripple sway in politics.
1 .Lack of Progress with Decentralization
The idea of decentralized services that are fun, reliable, and secure is still a pipedream. At present, they achieve two of three. Blockchains like Bitcoin and Ethereum are struggling to evolve amid disputes in their communities about how to govern and scale because decentralized services (even those with thousands of developers) simply can’t mimic the same functionality as centralized ones. Ripple’s triumphs at reducing the price of cross-border settlement, recent string of relevant institutional partnerships, and other successes contrasts more obviously in this environment and indicate that Ripple’s unilateral blockchain model is the future.
2. Swell Conference
The upcoming Swell conference was an impetus for late September’s price action as well. Swell 2017 was in late August, and sure enough, the price of XRP flew upwards by 100% on schedule.
Swell is hosted by Ripple and is one of the most anticipated cryptocurrency events of the year, and last year’s event set the standard for how serious blockchain firms should run a conference. This year is set to be even bigger, with the world’s preeminent experts on regulatory policy, payment technology, and finance gathering in San Francisco. Included are Ed Metzger from Santander Bank (a Ripple partner), R.J. Pittman (a former eBay executive) and President Bill Clinton. Should Ripple sign new banking partners, it could provide further momentum.
3. New Technology
Ahead of the Swell conference, Ripple made the savvy move of releasing a new technology to all its partners simultaneously. Called “multi-hop”, the update launched just days before Swell and enables RippleNet to settle payments on behalf of other firms. This significantly cuts down on the number of transactions and fees that a small bank would need to tolerate to do business in the ASEAN region, for example. Likely meant to drive investor hype before Swell, multi-hop is also a signal to the greater market that Ripple’s solution is one of the few that can demonstrate tangible progress, and a proven ability to add to its partners’ bottom lines.
4. Ripple in Washington
Ripple is a new and significant presence in a lobbying group that’s been formed in Washington, called the Securing America’s Internet of Value Coalition. Composed of the best fintech firms in the capitol such as the Klein/Johnson Group, these Washington lawyers will engage with lawmakers and regulators about the value inherent in emerging fintech solutions. A primary goal is to get decision makers to consider the tech and to formulate regulations that encourage innovation. Blockchain will be foremost among their concerns, and in payment for their services, the group’s lawyers and lobbyists will be paid in cash and XRP both.
By centralizing the administration of their next-generation blockchain payment platform in 2012, Ripple took an early bet. It gambled that blockchain would make the biggest and quickest impact in finance by aligning with institutional entities instead of disrupting them. The progress that Ripple boasts today juxtaposes awkwardly with its decentralized peers, having already managed to save banks millions.
Ripple’s investment in its centralized blockchain solution was a resounding success and has continually captured the market’s attention, leading to periods like this one, where people seem to realize that in terms of practicality, Ripple is king. The multiple converging stimuli of this late price action each highlight the astounding progress of Ripple in the space, yet also justify the value placed in this groundbreaking company. Ripple is one to watch as blockchain shakes off its slow year and heads into 2019.