It's been a while since the crypto-market has bled as much as it did in recent days. However, a coin seems to challenge the odds. The currency is XRP. While other better coins suffered double-digit losses, on some days XRP managed to record gains. The last few days have been so good for Ripple's native currency, which managed to overcome Ethereum as the second most valuable cryptocurrency.
Currently, XRP is behind Bitcoin on cryptographic charts with a market capitalization of $ 15 billion compared to the $ 12.3 billion Ethereum.
There seems to be renewed interest in the currency. Below we will analyze four factors that influence the Ripple value.
The interest of financial institutions gives the value of Ripple
Ripple's infrastructure is designed to make transactions faster and more convenient for banks and other financial institutions. Explain why the platform has already seen more than 100 institutions adopt its technology and there are others that come together from day to day.
The platform's blockchain, RippleNet, offers businesses and financial institutions different programs that help cross-border payments go smoothly.
This includes xRapid, a program that allows financial institutions to minimize liquidity costs if they use XRP as a bridge from a fiat currency to another. xCurrent which is a payment processing system for banks. It is also xVia that allows companies to send payments via RippleNet. All three solutions are essential to improve Ripple's value.
Before Ripple arrived with its solution, the SWIFT international payment protocol (used by financial institutions to send international transactions) had no competition. However, many people argue that it has the potential to make SWIFT obsolete.
Moreover, thanks to its ability to instantly transfer money all over the world, RippleNet has been adopted by people like Moneygram and Santander. However, it is important to note that, despite the adoption by many financial institutions, they currently do not use XRP for their transactions. So, once they start doing it, it's likely to increase the Ripple value.
The ripple value benefits from the continuous interest of the media around the Ripple project
The team of fintech and finance experts Ripple managed to nurture the media interest around the project through partnerships and customer acquisition. It was fundamental to the value of Ripple when the company has its feet off the ground.
The platform already has over 75 customers who actively use RippleNet. In addition to forming a customer base, the platform used strategic partnerships to create a specific "hype". As a result, this hype has evolved in the organic press that has helped the platform to create a media presence.
In the cryptic world, printing plays a crucial role. There is an almost measurable correlation between the amount of coverage achieved by a project and its evaluation. It's something that proved correct for Ripple. Positive media coverage helped the value of Ripple.
Speculative trading affects the value of Ripple
At the beginning of this year in January it became clear that the hodlers influenced the value of Ripple. This happened after coinmarketcap.com accidentally removed South Korean trade from its price statistics. As a result, $ 200 million in XRP temporarily vanished. It turns out that three of the most important Korean cryptocurrency exchanges control over 50 percent of XRP trade per day.
When XRP hit the maximum of $ 3.84 on January 4, 2018, Bithumb, the largest encrypted exchange in South Korea, showed that the currency was trading at around $ 4.47. This revealed that a 16.5% premium could exist in Korean trades.
But, time has shown that the award may have been a temporary effect. At the time of writing, the price difference of XRP on Korean stock exchanges and platforms decreased to $ 0.01.
Speculative trading is one of the main factors influencing the value of Ripple. It is visible through the sharp increases recorded in South Korean trade until regulation has become a barrier.
The value of the ripple is influenced by the regulations
As we have seen above, Ripple has been able to negotiate higher in South Korean trade due to colossal speculation. The Asian nation has one third of its population in possession of cryptocurrency. He led the way in embracing cryptocurrencies and blockchain technology.
To bring some order into the crypto markets, Korean banks have started to introduce some regulations. At the beginning of January, banks had warned traders and traders to freeze their accounts if they did not comply with the country's anti-money and know-your-customer policies. This meant that there was the possibility that traders would not be able to move national currencies into their cryptographic accounts.
The regulation proved detrimental to the value of Ripple. They stemmed the influx of people and money that was entering the cryptic markets. First there were hundreds and thousands of new trading accounts that were added to the Korean trades.
The wild price increase could be directly attributed to the increase in interest, however, this scheme has changed once the regulations have entered into force.