Ripple Up 76% In 24hrs, Topples Ethereum In Market Capitalization
Ripple has skyrocketed from $0.25 to $0.64 this week. In fact, the cryptocurrency has rallied 50% in the past 24 hours. The volumes have increased by nearly four times in a single day and reached $2 billion with lead taken by South Korea and Japan.
The uptrend was mainly driven by the news that RippleNet has gained a Saudi and a South African bank as its new members. Notably, RippleNet’s xRapid is expected to be launched next month.
In general, xRapid and RippleNet are simply a way to transfer fiat via crypto rails. So, for example, the system will function this way: a user buys XRP on say a European exchange and then sends it to a South African exchange. From there, the South African money will move through the fiat rails.
What should be understood is that the system may not need XRP token in particular. It can work with even Ether (ETH) or Bitcoin (BTC). A user can use these cryptos to send payment through remittance companies established on or after 2014. The issue is sending the fiat to an exchange and then withdrawing it at the other end can sometimes take a lot of time and can be a costly process.
Nonetheless, Ripple has turned ultra-bullish and has toppled Ethereum from the second place, based on market cap. It should be remembered that the fully-diluted market cap of Ripple is more than twice that of Eth and going by this measure even Stellar will be placed higher than Eth. The total supply of XRP is `100 billion. However, circulating supply is only 39.8 billion. The other 60billion and odd XRP is held by the founders of Ripple in an escrow account.
Calculating the market cap based on total supply is not done as it does not reflect the original picture. So, the circulating XRP tokens are only used for calculation.
Ripple is also often criticized for lack of transparency. This is clearly illustrated in the picture below:
While other blockchain networks reveal the movement of their native cryptos, no such information is available for Ripple. As a result, critics often point to the level of centralization. Users will not be able to download the node and verify the data. Therefore, a user has to trust the information provided by Ripple regarding the amount of cryptos in circulation. Notably, more than half of 21 nodes of Ripple network are run by the company itself.
Despite these issues, the crypto has managed to stay strong and rise to the second position. Crypto analysts also suspect short squeeze as the reason for the spike. However, the rally has totally changed the prevailing market sentiment.
At the time of writing this article, XRP was trading at $0.64, with market cap of $23.50 billion. Ethereum is trading at about $229, with a market cap of $23.31 billion.