What goes up, comes down, then back up
At the beginning of this year, Ripple’s XRP token showed a strong, upward movement, ascending toward $4 and reaching an all-time high.
XRP has climbed more than 1,400% over the last month, and over 36,000% for the year of 2017 making it the biggest crypto gainer of the year.
XRP became the second-largest cryptocurrency by market capitalization, overtaking Ethereum which has held that position for over a year.
The crypto community voiced concerns of Ripple’s company owning more than 60% of all existing XRP coins, thus making Ripple centralized in many ways.
Many also pointed out to the hype sensationalism that has been sweeping the market recently. Rumored speculation that Coinbase will add XRP and news of partnerships have helped XRP sustain its push.
And while the number of institutions that have partnered with Ripple have exceeded very rapidly, no use cases had been provided.
Ripple CEO Comes Out Swinging
Nathaniel Popper, writer for The New York Times, tweeted that he hasn’t heard of any banks that were planning on using Ripple.
Over the last day I’ve asked several people close to banks if banks are indeed planning to begin using Ripple’s token, XRP, in a serious way, which is what investors seem to assume when they buy in at the current XRP prices. This is a sampling of what I heard back: pic.twitter.com/zbfMqg4TpD
— Nathaniel Popper (@nathanielpopper) January 5, 2018
Brad Garlinghouse, CEO of Ripple, responding with this tweet:
Over the last few months I’ve spoken with ACTUAL banks and payment providers. They are indeed planning to use xRapid (our XRP liquidity product) in a serious way. This is a sampling of what I heard: pic.twitter.com/y3TN8YRC34
— Brad Garlinghouse (@bgarlinghouse) January 5, 2018
On January 10th, the price of XRP had fallen more than 40% from the all-time high it reached week before. Ethereum once again regained the No. 2 spot. Analyst have cited several factors that have contributed to XRP’s drop.
CoinMarketCap has recently decided to exclude prices provided by South Korean exchanges from its pricing algorithm. The Korean exchanges usually have prices more than 50% more than their Western counterparts.
This morning we excluded some Korean exchanges in price calculations due to the extreme divergence in prices from the rest of the world and limited arbitrage opportunity. We are working on better tools to provide users with the averages that are most relevant to them.
— CoinMarketCap (@CoinMarketCap) January 8, 2018
This move had been credited for XRP losing around $20 billion worth of market cap. Investors seeing the price drop without realizing the exclusion of Korean exchanges, may have furthered the sell-off.
Other conclusions could be profit taking by investors. XRP started the 2017 year at less than half a cent, and with such a strong run, it is inevitable that traders are going to sell.
South Korea Prepares Legislation
On Thursday, South Korea’s justice minister, Park Sang-ki, sent global cryptocurrency markets plunging when he said regulators were preparing legislation to halt cryptocurrency trading. XRP, along with the rest of the cryptomarket, had temporarily dipped to current year to date lows.
Ripple Teams Up With MoneyGram
On January 11th, Ripple and MoneyGram announced a partnership which caused the price of XRP to rebound on the news.
MoneyGram’s trial with Ripple hopes for a transparent, faster and, cheaper options international payments
“Our clients can move money as quickly as information,” said Ripple CEO Brad Garlinghouse.