Generally considered the world’s third-largest cryptocurrency, Ripple (XRP) recently experienced an astounding 14 percent rise, temporarily replacing Ethereum as the number two ranked cryptocurrency for what is now the fourth time over the last year.
This 14 percent rally occurred over a period which saw no other large-cap cryptocurrencies muster a rise of more than four percent.
While much of the discussion has been centered on XRP surpassing the circulation of ETH briefly, and whether a time will come where it can bypass it for a sustained period, it’s worth looking at some of the reasons why this rise happened.
Expansion Into the Middle East
At the 2018 Global Islamic Economic Summit in Dubai, Ripple announced plans to set up an office in the United Arab Emirates largest city.
This news comes on the heels of September’s announcement of a partnership with the National Commercial Bank, a Saudi institution that boasts more than five million customers worldwide.
Ripple’s global head of infrastructure, Dilip Rao, has confirmed that along with Saudi Arabia, financial institutions in Kuwait, Bahrain, and Oman have already begun the process of utilizing XRP to facilitate cross-border payments, or have begun to run pilot tests on the Ripple blockchain.
The Banco Santander Factor
Although first announced in March of this year, the strategic partnership between Ripple and $80 billion banking titan Santander wasn’t all that clear until the announcement in October of the integration of RippleNet into Santander’s OnePay FC mobile banking app aimed at cross-border payments.
The Ripple-based app was initially released in the UK, Spain, Poland, and Brazil, but expansion to other parts of South America, Asia, and Europe was also announced.
The success of this venture will likely play a huge role in determining how other financial institutions approach a possible relationship with Ripple.
The “X” Factor
Anyone who’s been involved in crypto for any length of time knows that we can see increases and dips for more obscure reasons. Not every spike can be attributed to something as easily identifiable as a partnership with a billion dollar bank or branching out into new territory.
Something as minor as a mention in a respected trade journal like the American Banker website, or an extremely tenuous suggestion that we could see XRP payments integrated with ApplePay by way of a Tweet by crypto-wallet provider Wirex can be enough to send the cryptosphere into overdrive, with proclamations of Ripple’s XRP rallying on “news of ApplePay option.”
Is the Momentum Sustainable?
When all is said and done the most critical question is can this momentum be maintained? On a number of occasions XRP has risen above ETH in becoming a distant 2nd to bitcoin, but each time it has run out of steam and slipped back.
Both crypto assets remain close in the race to establish the most prominent alternative to the industry mainstay, but with a $700 million edge on Ripple’s $21.2 billion valuation, Ethereum is still out in front. Barely.
One thing for sure is that it’s going to be interesting to see how both perform over the coming months.
