The Ripple (XRP) price took yet another overnight hit dropping to as low as $1.04. However, it did manage to mount an early morning mini-rally and get back up to $1.13. So, while it is about 7.5% down at the moment, it made about 7% back this morning.
While Ripple (XRP) price is down, interest in the underlying technology seems to remain steady. When Ripple was created it was aimed at being widely accepted by the global financial institutions. It hasn’t been exactly embraced with open arms but it is getting a lot of suitors. Companies are working on pilots and testing Ripple’s tech to see if it is a viable solution.
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Ripple claims that their tech is better for the world because it’s not mined, costing less in energy, it’s faster, and it’s cheaper.
Conflict of Interest?
Some people say that the company may be influencing the Ripple (XRP) price because they own over 50% of it. It is true that Ripple has some 55B XRP coins in escrow. Those coins are allowed to be released at a rate of 1B per month. Any of those XRP that are not sold go back into escrow.
On top of that, Ripple co-founder Chris Larsen still, reportedly, owns some 5.19B XRP along with his 17% stake in Ripple itself. That means that, of the 100B XRP coins in existence, Ripple and Chris Larsen own roughly 60%.
Does that mean they are affecting the XRP price? If so, and the goal is to generate more revenue, they’re doing a poor job of it. It’s highly unlikely that any kind of market manipulation is being done by them. Remember, the XRP price was at $3.84 not too long ago. Today it’s trading in the $1.10 area. Not exactly proof of any kind of wrongdoing, is it? One has to believe that those types of comments are most likely FUD (fear, uncertainty, and doubt).
SBI Holdings, a Japanese financial services company, stated yesterday that when it opens its SBI Virtual Currencies (SBI VC) exchange, XRP would be the only launch asset. They are the largest online securities firm in the country and have over 4M brokerage accounts. Japan is a country where Ripple (XRP) price has seen strong support in the past. With SBI’s new digital currencies exchange, it could see a lot more support as well. The exchange is said to give traders a “respected and reliable exchange.”
SBI VC is going to use the xRapid system for money transfers because of its speed, robustness, and low cost.
Low Volatility is Welcome
With major financial institutions being on board, a highly stable Ripple (XRP) price is a welcome situation. Banks are in the business of making money. If they were to utilize a money transfer system where the digital transport currency varied quickly and widely, it could negatively impact their business and bottom line. With a more stable Ripple (XRP) price, comes more confidence from those sectors. Since Ripple is really aiming to become the default bank-to-bank, cross-border payment processor, this may be something they are hoping for.
Even though transactions take just four seconds, high volatility would not be beneficial for banks. Ripple has stated that volatility doesn’t impact if financial institutions will implement systems like xRapid, mainly because of the speed in transaction processing.
What’s Next for Ripple?
The company has to continue to work on obtaining new clients. Regardless of what the business does, XRP is here to stay. Ripple can still contribute code to the XRP ledger, but they do not have control over it, they say. But Ripple and XRP were created to become a global payment solution. In order to keep themselves growing they need to continually add new partners. That means they are on an eternal path of public relations and attempting to woo new big financial institutions into pilot programs in order to show them it works. They must also continue to fight against the idea that cryptocurrencies are a fad and inconsistent. This has been the talking point for several global executives who have said that they would never turn over their payment processing to a cryptocurrency. Some may have walked back some harsher statements, like Bitcoin being a fraud. However, it seems they are still slow and ponderous in changing their minds about something new that may impact their business.
It’s certainly going to be an uphill struggle for Ripple. However, with each announcement of a pilot program, or an implementation, they gain momentum. That could carry them to financial success as a company. It remains to be seen what that means for XRP itself. It could have no impact on its price. Or it might have a long slow steady climb back to its all-time high of $3.84, and beyond.