San Francisco-based Ripple Lab, Inc.’s XRP token has surged over 40% in the past 24 hours and is currently trading at $0.5305 according to data from CryptoCompare. As covered on CryptoGlobe, the XRP price increased by 13% on September 20th.
XRP 24-Hour Price Chart via CryptoCompare
There are several possible reasons, or factors, which may have contributed to the significant increase in the cryptocurrency’s price. As pointed out by the Ripple company’s chief technical officer, David Schwartz, there’s a supportive ecosystem being developed around the American firm’s suite of financial products.
Web Monetization With XRP
Schwartz mentioned that another San Francisco-based startup, Coil, is “testing their web monetization flat rate product out on Wikipedia with XRP.” As described on Coil’s official website, users have to sign up through their website and then pay a fixed monthly subscription fee.
Somewhat similar to how the Brave browser aims to integrate payments with Basic Attention Token (BAT), when Coil’s registered users visit a “supported website”, the company donates a certain amount of the users’ deposited XRP to the website’s creator “on their behalf.”
According to a Medium post by Stefan Thomas, the founder of Coil, his platform will introduce a more effective monetization system, so that content creators are fairly compensated for their work.
“Exaggerated” Market Reaction
Despite this seemingly positive development for the XRP token, many have argued why people would want to start paying for content on the internet, considering most services and information sources are free to use.
It appears the market’s reaction may be “exaggerated”, as noted by Tim Enneking, the managing director at Crypto Asset Management. Moreover, Ripple’s xRapid product, which is reportedly designed to reduce the transaction costs associated with cross-border transactions, has not even been launched yet.
As covered on CryptoGlobe, the Ripple company recently partnered with the PNC Financial Services Group, one of the largest banks in the US. Notably, PNC has also joined RippleNet, a decentralized global network of banks and payment providers, and is reportedly planning to use Ripple’s xCurrent in production.
Exchanges “Pumping”, “Huge Dump” In October
As described on Ripple’s official website, xCurrent aims to be “an enterprise software solution that enables banks to instantly settle cross-border payments with end-to-end tracking.” Other financial institutions that have started using Ripple’s suite of products include Saudi Arabia’s National Commercial Bank (NCB).
However, at this point, all of Ripple’s financial products are in their early stages of development and adoption. So, it seems traders and investors are overreacting to Ripple’s recent announcements.
Commenting about the surging XRP token, twitter user XRPcryptowolf warned there might be “a huge dump” in October. He also claimed that cryptocurrency exchanges were mainly responsible for “pumping” XRP’s price, as they may consider Ripple’s partnership with PNC and the upcoming (annual) Ripple SWELL conference as “good news.”
This XRP pump makes more sense. It's the exchanges that are pumping it especially after good news from the partnership with PNC Bank & the Ripple SWELL conference nearby. Don't be surprised about a huge dump closer to the beginning of Oct. Remember: Buy the rumor sell the news. https://t.co/TxNWb1EOld
— XRPcryptowolf (@XRPcryptowolf) September 20, 2018
Other seemingly positive developments for Ripple include its chief marketing strategist, Cory Johnson, announcing that the American fintech firm will partner with crypto exchange Bittrex, Bitso, and Philippine-based Coins.ph to conduct cross-border payments with xRapid.
$5 Trillion Foreign Exchange Market
As noted by several crypto market analysts, it’s largely “speculation” and “rumors” that are driving not only the XRP price, but also most other digital currencies. Twitter user Rachel Lee seemed to have jumped to a hasty, and maybe a far-fetched, conclusion that “Ripple was strategically targeting specific corridors which aligned with [the] $5 trillion a day Foreign Exchange market.”
A few months back we had a look at #Ripple's early partnerships & found a pattern which led us to believe that Ripple was strategically targeting specific corridors which aligned with d $5trillion a day Foreign Exchange market. Lets dive back in⤵ #XRPthebase #xrpthestandard #xrp pic.twitter.com/bX7Ka1gvJC
— Rachel Lee (@LeeR912) September 15, 2018
While Ripple may actually have “working products”, according to a recent research report by InvestInBlockchain, these cross-border payment solutions are nowhere near mainstream adoption like services such as PayPal.
Whether or not Ripple’s financial technology will be effective in the long-term remains to be seen. The level of competition now in the crypto industry has also reached new heights, as Stellar (XLM), a 2014 fork of the Ripple protocol, also aims to provide an international payments solutions.