XRP has seen remarkable growth this year, with an increase of over 400%. This surge has been underpinned by the easing of regulatory pressures surrounding Ripple Labs, the company behind the cryptocurrency. Ripple is now seeking a national bank charter, a move that could enhance its legitimacy among investors and further bolster its market position.
Currently, XRP is trading at $2.50, reflecting a slight decrease of 0.39% in today’s market. With a market capitalization of $150 billion, the day’s trading range fluctuated between $2.48 and $2.52, while the 52-week range has varied from $0.49 to $3.65. The trading volume for the day was reported at 1.7 billion, with more typical trading reflected in an average volume figure.
Despite its impressive rise, there are doubts about the sustainability of these gains. The central argument driving the optimism around XRP is related to its potential adoption by banks. The general belief is that as more financial institutions integrate Ripple’s technology, the demand for XRP will increase, consequently driving its price higher. However, this assumption may be flawed.
RippleNet, the primary product offered by Ripple, can function effectively without requiring banks to directly acquire XRP. While On-Demand Liquidity (ODL), another significant product, does utilize XRP as a bridging asset, its adoption remains limited among larger banks, which constrains XRP’s overall demand.
Compounding these concerns is Ripple’s recent strategy shift. The company has acquired a stablecoin payment firm for $200 million, indicating a pivot towards stablecoins in its service offerings. This development is significant as Ripple’s pursuit of a banking charter suggests that stablecoins, particularly their newly introduced RLUSD, may become a focal point of its business model. If RLUSD gains traction, it could diminish the demand for XRP as a means of exchange in ODL transactions.
While XRP may enjoy short-term gains, potential investors seeking long-term, reliable returns might want to consider diversifying their portfolios beyond this cryptocurrency as the landscape evolves.
