Ripple Volatility Analysis
The third cryptocurrency by the market capitalization — Ripple (XRP) has surged by 80% over the previous week as the general market continues on its steady recovery. The news that Ripple is set to launch its xRapid product has caused excitement amongst investors and traders.
There has been a lot of positive news surrounding Ripple which is the reason for the sharp recovery in its price. For example, previous week Ripple developers announced a launch of a service that will use the digital currency — xRapid.
xRapid is a service that enables financial companies such as payment providers to speed up money transfers into emerging markets using XRP.
Sagar Sarbhai, head of regulatory relations for Asia-Pacific and the Middle East at Ripple stated that XRapid solution became possible due to taking a more tempered approach from regulators toward digital currencies and seeing the benefits of crypto(another explanation of the huge XRP leap).
At the moment, Ripple has over 100-member banks and financial institutions use the company’s xCurrent solution, which allows for quick settlement for cross-border payments but still requires nostro-vostro accounts to be held by participating banks.
Xrapid is the next step in the process. It utilizes XRP as a bridge asset between currencies thus eliminating the need for nostro-vostro accounts. Creates larger savings for banks.
I’ve publicly stated that by the end of this year I have every confidence that major banks will use XRapid as a liquidity tool,” Garlinghouse told CNBC in an interview at the Money 20/20 Europe fintech conference in Amsterdam
It is important to note that the XRP token itself is not used to send funds. Instead, the network simply works by generating transactions consisting of IOUs. It is the execution of such transactions that use XRP tokens as fuel, that is why banks — users of the system, are absolutely not interested in increasing the cost of commissions (RPX), so it is unlikely that they will allow the price of XRP to grow excessively.
Also, yet another interesting fact about Ripple is related to its co-founder Jed McCaleb himself. According to the Wall Street Journal, after the successful price surge Ripple price may be down to a selloff by Mr. McCaleb (shown on the picture above).
Tracking the wallet of Ripple co-founder Jed McCaleb who left Ripple in 2013 and has been the co-founder of rival Stellar since 2014, has revealed accelerated sales in August, but XRP still managed to deliver above-market performance in the past day.
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