Ripple had an amazing 2017, with several media outlets declaring XRP to have outperformed Bitcoin in terms of exposure and market gain. Ripple started the year trading at 0.006 USD and ended at over one dollar, an increase in value of 17,000% compared to Bitcoin’s 1700%. The announcement of adoption by American Express kicked off the most recent price run, followed by Michael Arrington’s $100 million XRP hedge fund and the official lockup of 55 billion XRP in escrow. In the last week alone, the search index for Ripple has more than tripled relative to Bitcoin. Ripple gained massive momentum through the end of the year and is looking to make a strong push in 2018 as one of the most dominant cryptocurrencies on the market.
Here are just a few of the milestones that could continue the exponential rise of Ripple:
Listing on Coinbase
Adoption, adoption, adoption. At this point, greater visibility and market share is one of the most important factors to the long-term growth of XRP. There is enough positive press surrounding Ripple for newcomers to buy XRP and start diving into the technology. There will always be investors looking for profit without attempting to understand the value of the currency. Ripple offers something for both parties, with almost guaranteed appreciation in value from the 2 USD mark, particularly with the addition to Coinbase looming on the horizon, and enough substance in the usability of XRP to keep long-term holders intrigued. Coinbase will continue to be the darling of the altcoin industry until another user-friendly, app-based exchange can start eating into the market share. At over thirteen million users, Coinbase offers one of the largest portals for the general public to start investing in cryptocurrency. Coinbase also benefits from having ACH and Credit Card purchases, an advantage over most exchanges which operate solely on crypto/crypto pairings. While Coinbase quelled XRP-addition-rumors last week with an official statement that they would not be adding altcoins at this time (and subsequently brought about a bearish downturn in price), Brian Armstrong, Coinbase CEO, has announced previously that his company will be adding more cryptocurrencies to their selection in 2018. Ripple is still the most obvious choice for Coinbase to add, with a high market share, large trade volume and attractive entry price. For as much as XRP has to offer to Coinbase, the U.S. based exchange is still the largest gatekeeper to Ripple achieving greater adoption and new all-time highs in value.
XRP for Internet Commerce
Ripple’s focus thus far has not been on generating commerce for internet stores like Amazon, Overstock, etc. XRP is designed for large, cross-border transactions like those used between banks. While Bitcoin and Litecoin are working to supplant traditional fiat, Ripple has been after Swift and other technologies that provide bank-to-bank services. However, Ripple offers a significant benefit to general market commerce. The coming crisis for cryptocurrency is not centered around stagnating prices, but stagnating real-world use. Much of the conversation about Bitcoin outside of enthusiast circles is simple: What can I do with this? Regardless of your opinions on Roger Ver and Bitcoin Cash, BCH has managed to develop a strong media presence by presenting itself as a usable form of Bitcoin. XRP could be a coin to follow suit.
Ripple is already ahead of the pack in terms of real-world use, but it could do more to demonstrate the need for XRP. Michael Arrington’s hedge fund is one example of XRP usability outside the framework of bank transfers. General internet commerce could be another, given that XRP offers among the best transaction speed and lowest cost of any crypto on the market. The rise of services like Shapeshift and Changelly could make buyer currency less relevant, as a customer can easily exchange their crypto for another. Sellers, on the other hand, are still in need of a native currency to simplify their business. A company like Amazon could choose to accept XRP for its superior performance in transactions. Ripple also offers relative price stability that is important for engaging in commerce. For established exchanges, offering XRP pairings to altcoins is another avenue. Ripple is consistently in the top 3 of total market cap, with some of the highest transactions volumes. The fast speed of transfer, negligible costs and proven scaling features makes deposit and withdrawals less of an ordeal than what the Bitcoin and Ethereum networks are currently experiencing.
Overtake Ethereum for #2 in Total Market Cap
Overtaking Ethereum to claim the #2 spot in terms of total market cap would represent a significant achievement for Ripple in 2018. XRP managed to supplant Ethereum for a short stint, but not long enough to define itself as the second most dominant currency on the market. While the influx of capital is not something Ripple has control over, they can shift favor in their direction by continuing to prove the use for their technology and grow adoption of XRP. Ripple is currently 50 billion USD behind Ethereum (and widening), but still a gap that could be covered by the Coinbase listing alone (BCH leapt 30 billion USD following its addition). In the long-run, market cap will be less relevant as various currencies distinguish themselves with underlying technology and real world use. Stellar Lumens poses a greater competitor to XRP, in terms of what the coin is ultimately trying to accomplish, than something like Bitcoin or Ethereum. However, for the coming year, as more investors and members of the general public invest in cryptocurrency, total market cap is still a distinguishing honor and a simple demonstration of mutual interest and potential profit. Ripple holding the second spot (or even creeping into Bitcoin’s position at the top) would create an irresistible spotlight for a currency that has already managed exponential gains.
Getting More Banks to Commit to XRP for Liquidity
American Express adopting Ripple for cross-border transactions between the US/UK was important for growing adoption and providing a further example of real-world use. But XRP needs more use-cases to quell the fear of current holders. The lack of direct, XRP transactions is likely what held the price down for so long despite big announcements like AMEX and Arrington XRP Capital. Investors are worried that the Ripple technology will be favored by banks while the coin becomes increasingly worthless. There will always be a connection between the value of Ripple and XRP. Ripple is the largest holder of XRP (~60 billion), which means they have an interest in the value of the coin. They also have the option of finding unique ways to use XRP in the event that bank-to-bank transactions never materialize. Which means as Ripple the company/technology becomes more entrenched in the financial world, the potential of XRP implementation grows even higher, creating a correlation between the value of both.
That being said, XRP would benefit from an announcement of a bank or financial group using the coin for liquidity, similar to the one made by Cuallix in October 2017. Cryptocurrency has massive potential in the developing world, so much that its use tends to become myopic to Western investors. Stellar Lumens is targeting the Southeast Pacific for adoption of XLM. Ripple should have little difficulty finding a bank that employs frequent cross-border transactions to give XRP a chance. Even a handful of banks could create a domino effect that leads to widespread adoption. If the rumors of Western Union, or a similarly large money transfer company backing XRP prove to be truthful, not only will the price of XRP skyrocket to levels previously unimagined, but could also pave the way for a cryptocurrency outside of Bitcoin to become ubiquitous in the financial world.