XRP, the token of Ripple, has risen sharply and reached the top gainer of Binance in a short time, which is attracting the attention of the community. For investors who have been in the market for a long time, this project is quite familiar. However, most newbies don't know what Ripple does, and why it "pumps"? Find out more details with Holdstation below.
Key Takeaway:
- Ripple is a payment project similar to BTC with many improvements.
- Ripple is special thanks to its backer, team, and giant partners in the financial industry.
- XRP thrives on expectations of winning a longtime lawsuit with the SEC.
- This is a project that should pay attention in the long term.
What is Ripple?
Currently, Ripple is the 6th high market capitalization coin, and once entered the top 2 only below Bitcoin. In fact, Ripple has been built and developed even before Bitcoin since 2001 under the name RipplePay. The goal of the project is to provide a global digital payment solution, without cumbersome procedures like traditional forms.
It sounds almost like Bitcoin, but Ripple is more for the global banking system, contrary to BTC's philosophy which is in favor of decentralization and lawlessness. Therefore, the investor community or most of the big anonymous sharks are not very interested in Ripple. But what helped XRP climb to the top of the market cap?
Special point
Personally, I think the following reasons have made XRP one of the biggest cryptocurrencies on the market today:
Backed by "giants"
Despite raising capital in 2013, when everyone thought cryptocurrencies were a scam, Ripple raised $5.5 million – a huge number at the time. Especially from all the giant companies like Digital Currency Group, Standard Chartered, Google Ventures or the famous crypto fund a16z. This shows the great potential of the project.
Industry top team
Ripple was founded in 2011 by Jed McCable, the former founder of Mt. Gox, the largest BTC exchange in the world at the time, once held a 70% share of the global BTC trading market. The people who followed McCable to build Ripple Labs are also big names in the industry like Arthur Britto or Chris Larsen, CEO of E-Loan.
Outstanding payment technology
XRP allows extremely fast transactions, no formalities, only takes 4 seconds to process. Plus the fee is also extremely cheap, only about $0.0002/transaction. Although compared to crypto, these are already very good numbers, but especially for traditional parties like banks, this is a technological revolution in payments.
Partners with financial "giants"
Ripple's strongest point is its acceptance of payments and cooperation with the world's leading financial institutions. Currently, Ripple Labs has more than 100 partners including major reputable banks such as JP Morgan, Standard Chartered, Santander, Barclays, Bank of America and American Express, etc. ➡ This advantage I think is superior to BTC and ETH in terms of value. consent/legal matters.
In addition, a special factor is that the XRP token has no inflation. The entire amount of XRP has been 100% unlocked from the beginning, and is currently partially stored in the Ripple Labs ESCROW repository.
What caused XRP to surge recently?
Thanks to the above advantages, the price of XRP has also increased sharply, helping the project to remain at the top of the crypto industry until 2020. SEC - US Securities and Exchange Commission has filed a lawsuit against Ripple over its 2013 IPO. consider that this is unregistered security. It also revealed that the CEO of Ripple personally traded XRP worth about 600 million dollars. From the SEC's point of view, XRP is a "security" which means it is subject to the laws and regulations of the SEC.
Take a look at some of the key milestones of the case:
- December 21, 2020, SEC sues Ripple Labs and 2 CEOs.
- December 28, 2020, Coinbase officially delisted XRP.
- March 3, 2021, Ripple CEO filed a letter claiming that the SEC has no basis.
- March 8, 2021, SEC responds. And since then, the case has been continuously disputed until now.
As analyzed above, unlike BTC and other cryptocurrencies, XRP is very closely tied to the traditional financial system. Therefore, this lawsuit will greatly affect the business and development of XRP.
However, recently the lawsuit is showing signs of coming to an end with Ripple winning. ➡ Investors' expectations of 2 years of pent-up are released ➡ Leading to the recent pump.
According to data from Santiment, the percentage of investors holding 100,000 – 1 million and 1 million – 10 million XRP also gradually increased from the bottom of the end of 2020 and is creating an ATH peak at this time. Fully support the above bullish hypothesis.
Personal opinion
At a glance, it can be seen that this is just a price pump according to the news, and the community has FOMO. However, this will be news that will have a lasting effect on the value of Ripple – allowing XRP to expand its partner file in the future easily. At the same time, XRP still has an amount of tokens in stock up to 55% of the total supply, and the Ripple community can vote to gradually burn this amount of tokens, which is also a far-fetched expectation for XRP. In the short term, investors should take profits gradually on XRP when the news is released and BTC is also in a bad state, but XRP should be watched in the long term.
