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While bitcoin dominated stocks in November with its rally to an all-time high, one of the most prominent alternative cryptocurrencies, XRP, silently leapt 169% during the month to reach the top of the performance chart among digital assets in CoinDesk. 20.
The move left XRP, the payment token used in Ripple’s global payments network, up 225% in 2020, versus the oldest and largest bitcoin’s gain of 165%. XRP has a market capitalization of $ 21.4 billion, a fraction of the approximately $ 350 billion of bitcoin.
The frenzy in XRP could be driven by a looming launch of free “spark” tokens for anyone holding XRP, some digital market analysts told CoinDesk last month.
There is also the possibility that some first-time cryptocurrency buyers may not be aware that it is possible to buy a fraction of bitcoin, divisible to eighth decimal places, instead of an entire token. For the novice investor, XRP, which currently changes hands at 62.3 cents, looks a lot cheaper on a price chart than bitcoin’s $ 19,087.
“As the digital assets space saw renewed interest in the second half of 2020, a new wave of investors are looking for ways to gain exposure,” said Brian Mosoff, CEO of the Canadian publicly traded investment fund Ether Capital. “Ripple appears to offer visibility into their portfolios and a quick Google search may lead some users to believe that XRP is cheap and likely to become a product used by banks for cross-border settlement.”
Stellar, another payment token founded by Ripple co-founder Jed McCaleb, was the second best performer in November among CoinDesk 20, gaining 153%. It increased by 313% over the year.
For comparison, bitcoin was up 40% in November while ether, the native cryptocurrency of the Ethereum blockchain, was up 56%.
Ether Capital’s Mosoff, for what it’s worth, says he’s skeptical of XRP’s earnings.
“Ripple has struggled to achieve widespread institutional adoption despite years of effort,” Mosoff said.
