Crypto underdog
Considering that XRP was once number 2 in the crypto market behind Bitcoin, the current price of $0.43 in mid-May doesn’t seem very sparkling. Since the end of the crypto boom in 2018, XRP has only gone down. Meanwhile, Ripple has slipped to 6th place, but a recovery rally seems likely. What’s the case for it? “Coincierge” recently noted that XRP was able to quickly jump above the long-standing support line at US$0.42 thanks to a “mini-rally”, as evidenced by the current price.
This could be an indicator of an uptrend – if Ripple manages to sustainably assert itself and surpass the 56 US cents. Then it will continue unstoppably towards the mid-60s. Jannis Grunewald: “Staying above it may help to invalidate the bearish thesis on the market […] with the price recovery, XRP technicals have indicated the start of a positive price action.” Since 12 May, capital has again been flowing in more than it has been flowing out; however, caution is still advised.
Ripple Labs’ lofty goals
What makes XRP special is that Ripple Labs wants to establish a widely recognised peer-to-peer digital payment network based on blockchain technology. A lofty goal that is still some way from being achieved, but which nevertheless helped the coin to succeed in 2017, when the tokens’ market capitalisation rose from US$8 billion to over US$120 billion in December. This bull market lasted until February 2018, when the market capitalisation dropped again to around 40 billion US dollars.
The ups and downs in market capitalisation also affected the fortune of Ripple founder Chris Larsen: Since Ripple Labs holds a large share in XRP, Larsen could have become the fifth richest person in the world in the meantime. But easy come, easy go: With the falling market capitalisation, the fortune also shrank again. Since then, the XRP price has not really taken off: not even in the crypto year 2021 was the XRP price able to climb back up to its former heights.
Unpredictability
And in the current downturn phase, XRP has been dealt another major blow: at almost 50 per cent, Ripple is at the top of the list of coins with the highest losses. The reason for this is the US Securities and Exchange Commission (SEC), which accuses Larsen of selling unregistered securities – namely XRP tokens – and taking 1.3 billion US dollars in this way. The trial is ongoing, but the uncertain outcome is not conducive to firing up the XRP price in the current situation.
Nevertheless, the mini-rally proves that the tide can turn quickly – and if the process develops in Ripple’s favour, nothing stands in the way of a comeback.