Ripple’s cryptocurrency (XRP) hit its all-time high against USD on May 8th, briefly surpassing Ethereum’s $8.2 billion market cap by nearly $300 million.
Bank Adoption Driving Price Growth?
XRP’s rapid growth over the past 90 days has been one for the history books. From a little over 1 US cent in late February, it’s climbed to $0.21 in less than 2 months time, a 20x gain.
Ripple, Inc. claims that the foundations for this runup was laid in late 2016. The company’s head of XRP markets Miguel Vias declared that “adoption with banks puts XRP in pole position to become a global settlement asset, which translates to more liquidity for [exchanges], and more value for institutional and individual investors.”
Prior to this month, XRP’s all-time high was $0.066 in late 2014, during which it was also the largest cryptocurrency by market cap after Bitcoin. It has hovered close to $0.02 for the majority of its existence.
Or Is It Just More Speculation?
Some pundits remain unconvinced however, claiming that the XRP spike is a play to acquire more bitcoin. Investor and entrepreneur Vinny Lingham said on Twitter, “Pump alts, swap into BTC …” referring to the overall trading strategy being taken by speculators. Others on Twitter and the BitcoinTalk forum claim that banks adopting Ripple technology will have no impact on XRP usage.
With the dust now settling after XRP’s day-long rally, Bitcoin’s price has emerged in the $1,650 range, climbing over $100 in some exchanges.
The Majority of XRP is Still Held By Ripple Labs
Some observers have pointed out that based on the $0.20 price, Ripple’s true market cap may actually be $23 billion, since over 62% of all XRP are held by Ripple Labs and have not been released to the market. As described in their XRP portal page, Ripple Labs regularly distributes more of these tokens as needed by the ecosystem, estimating that they will have distributed 50% of the total XRP by 2021.
At press time, XRP has settled back below Ethereum at a $7.9 billion market cap — still a far cry from its February market cap of just $220 million.
Do you hold any XRP? What’s your theory for the recent bull run? Let us know.
Images via CryptoPop