Ripple was able to momentarily evict Ethreum out of the second crypto ranking yet again based on market cap. And this wasn’t exactly the first time that it happened. It was reported that Ripple was able to go up by 14% on the day when Bitcoin was trading sideways. Other large-cap cryptocurrencies weren’t able to leap higher than 4%.
Can Ripple Sustain its Bullish Ways?
The question is if Ripple can sustain the momentum? Ripple has been making news lately. One of the things that has been promoted widely is the xRapid. This product allows banks and institutions to make use of XRP cryptocurrency. According to Ripple, it is the “bridge” between fiat currency and cryptocurrency that can lessen the cost of cross-border transactions.
It is also because of xRapid why XRP has been able to surpass Ethereum’s market cap on previous occasions. However, these cases didn’t last too long. In September, we’ve seen XRP go up by as much as 64% in just a single day. It has peaked at $30 billion market cap before it mellowed down to just $11 billion in a matter of two weeks.
But one problem that has XRP experienced is that it runs out of gas quickly. Therefore, it can’t sustain the momentum to get to the second place in terms of market cap. However, it is true that both Ethereum and Ripple remains neck and neck. Ethereum presently has a $21.9 billion market cap while Ripple has a $21.2 billion market cap.
On The Rise Despite Being Questioned as Security
Coinbase is a game changer when it comes to the price movement of cryptocurrencies. The $8 billion crypto platform has been known for influencing cryptocurrencies once they announced that they are going to support certain tokens or coins. However, the debate continues. There are pros and there are cons when it comes to XRP. And until now, it seems that Coinbase is careful not to align itself on a coin that has not yet proven to be a commodity.
Ripple has been dealing with lawsuits with claims that XRP is a security. Keep in mind that Ripple owns the majority of XRPs. And also, Ripple reacted by hiring the right people to help “decentralize” XRP. This was the reason why the US Securities and Exchange Commission didn’t mention XRP as a commodity but instead just chose to name Bitcoin and Ethereum.
Brad Garlinghouse mentioned that securities give you the rights to governance, ownership of a company, and dividends. As for XRP, it has none of these benefits that were mentioned.
Aside from the lawsuits, there is also the issue that Ripple product isn’t exactly lessening the cost of cross-border transactions. Western Union partnered with Ripple. But later on, Western Union mentioned that Ripple didn’t significantly lower the cost of cross-border transactions. Could this be the case with the xRapid as well? However, Ripple countered that the sample size was too small to see any significant savings.
Will XRP finally be able to be considered a commodity? Will there be more institutions willing to try out Ripple’s products in the coming months?