Ripple believes that XRP is the answer to bank payment problems. They also think that their systems, which use the XRP cryptocurrency, can totally modernize the way banks move money between them. However, some banks, even some who have partnered with Ripple, are not so keen on that idea. The Ripple price has shown uncertainty.
A Ripple Price Problem
The problem with the Ripple price is that it fluctuates wildly on what seems like a daily basis. It’s as if XRP is a surrogate stock for Ripple the company but it moves exponentially unlike standard stocks. When there’s an announcement about a new partner, Ripple price moves upward fast. When there’s some potentially bad news it drops just as quickly. Ripple wants XRP to be the new underlying way that the world moves its average $76M daily. But that may be a problem for them.
The reason to buy XRP is that it has a specific purpose, bank-to-bank money transfers. There’s a set number of tokens, and small slivers of it are destroyed for each transaction.
However, banks aren’t exactly keen on giving over their money moving system to a cryptocurrency. In fact, numerous executives at global banks have stated that there is little possibility that they would trust a crypto with the money their corporate clients are moving.
Does XRP have Value?
As with many cryptocurrencies, the question with XRP is, what will someone pay for it? When the Ripple price rocketed to $3.84, it instantly made billionaires of the Ripple founder and some others. There are only a total of 100 billion XRP and around 55 billion are locked away in escrow. Ripple has set it up so that a billion XRP can be released per month. Any of those tokens that are not purchased go back to escrow. So each month the amount of XRP available could jump up. That could then, by laws of supply and demand, drive down the Ripple price. Right now there’s a sort of artificial scarcity of it with just 38.7 billion in circulation and of those approximately 5.19 billion of those are in the hands of Ripple co-founder Chris Larsen. Unless he sold them when the price hit $3.84.
Since XRP wasn’t taken to by big financial institutions, Ripple went another route and created systems that utilize the underlying blockchain technology. They have created xCurrent to process payments, xRapid for source liquidity, and xVia to send payments. xRapid actually could see rapid adoption because it gives companies the ability to move money into new markets without having an account full of that market’s currency.
It’s hard to say what will happen with the Ripple price in the future. XRP is highly reactive to news which means many crypto traders view it as a target for scalping more than a long term hold. That adds to the volatility of the Ripple price. It may never see enough traction to move higher or it might see huge gains.