On December 29th Ripple soared by more than 55% to reach an all time high of $2.23 implying a market cap of more than $86 billion which was well-over Ethereum’s $73 billion at the time. Coverage seems to be infiltrating mainstream media now, with Ripple even getting a mention on the BBC.
So what has caused this market reaction?
I think the market is taking notice of Ripple’s speed, reliability and scalability — which has strengthened the demand for Ripple where it’s listed. Ripple has gone from being listed on six exchanges earlier this year to more than 50 worldwide.
At a fundamental level, growing adoption of Ripple seems to have driven its rise in value. Over the weekend, three of Japan’s largest credit card companies revealed they had signed up to use it to handle payments and settlement. Prior to this announcement, South Korean and Japanese banks announced a pilot project that would use Ripple to handle cross-border payments. These real world uses cases for XRP in these markets is probably why the South Korean cryptocurrency exchanges like Bithumb, Coinone, and Korbit have accounted for more than half of Ripple’s $4.5 billion daily trading volume. Interestingly, Asian investors continue to pay a premium for XRP, on Bithumb, it’s being traded at $2.76, more 25 percent higher than the global average price according to data taken from Coinmarketcap.com.
These events in Asia are believed to have prompted the bump in value. In addition, JoelKatz also known as Ripple’s Chief Cryptographer, David Schwartz, mentioned about “two household names” for the next wave of xRapid customer announcements.
For the most part, a lot of the price action is fueled by the anticipated XRP listing on Coinbase, the largest and most liquid exchange in the US, which is expected to happen imminently. With rumours around XRP being listed on Coinbase, huge sums of money is flowing into XRP, with one investor purchasing 2.7 billion XRP worth about $4 billion. There’s an interesting Reddit thread discussing this transaction.
A few months ago Coinbase released their Digital Asset framework which outlines their criteria for listing a Cryptocurrency on their site and unsurprisingly XRP satisfies more than few requirements. The Coinbase listing rumours were sparked by a video doing the rounds on Twitter, although there has been no formal announcement from either Coinbase or Ripple yet.