Growing Partnerships = Building Investor Confidence
Price builds confidence. Price creates excitement. But partnerships and adoption are the bedrock to long term valuation. Myopic investors and day-traders may have no interest in what Ripple offers investors a year from now, but the massive list of partnerships and XRP-related adoption stories that Ripple has put together since the start of 2018 is nothing short of remarkable (especially when compared to the rest of the glacial-like market). If you were to take the same volume of adoption and partnership building that XRP has achieved over the last four months and apply it to Bitcoin, the latter would be valued at well over its last all time high of 19500 USD.
The industry of cryptocurrency craves the type of news Ripple is able to generate–it just bemoans that the currency is entrenched with the financial industry. There are ardent supporters of both Bitcoin and cryptocurrency that see decentralization as a way for the world to move past the need for banks and centralized monetary powers. But the financial world is money. For cryptocurrency to replace fiat and reshape the digital landscape of currency, it requires integration and disruption within the financial world, not standing on the corner of Wall Street protesting. You want crypto in the building, at the table, with the full attention of high executives. Adoption can grow through grass roots and general public support, but the financial industry is going to have a huge sway in both the price and integration of cryptocurrency. The more Ripple is able to entwine XRapid and XRP into existing financial service structures, the more likely it is to offer long-term stability and value.
Eventual Coinbase Listing
Lost in the meteoric price drop of Ripple from January’s all time high of 3.80 USD to today’s pricing of 0.54 USD is the possibility of Coinbase actually listing XRP. We have written before about why it doesn’t make sense for Coinbase to continue losing out on transaction fees and exchange competition for users trying to buy the third most popular cryptocurrency by market cap. Ripple is becoming more entrenched in both the financial world and that of cryptocurrency exchanges. Either Coinbase will have to play along with Ripple at some point, regardless of what their ethos is towards decentralization or rumors of Bitcoin fanboy worship.
Coinbase is a company looking to go public. They could be saving a Ripple announcement–including earnings projections from the soon to be boost in fees and user registrations–for a time that is more strategically beneficial to the company. More than likely, Ripple will be listed as a package deal of other cryptocurrencies being added to the exchange, or as one coin in a series of listings. Coinbase CEO Brian Armstrong announced on CNBC in December 2017 that his company was intending to add “many more” altcoins to the current offering. Since the Bitcoin Cash fiasco that shortly followed Armstrong’s announcement, there has not been a single word or indication from Coinbase that they are planning to follow through with the commitment. However, it could also be a simple PR move to get further away from the Bitcoin Cash addition, and allow the market to move on and cool down from allegations of insider trading (which has now grown into a lawsuit against Coinbase). It’s hard to imagine that Coinbase will go the rest of the year without making another addition to their exchange.
There is market and investor fatigue in news pairing XRP with Coinbase. Given the precipitous fall in Ripple valuation following Coinbase’s January update essentially denying any XRP partnership (and again in March when Ripple CEO Brad Garlinghouse was appearing alongside a Coinbase exec on CNBC), investors are weary to buy into news surrounding the exchange listing. But given the volume and market cap position, Ripple is still the most obvious choice for the company to pursue, regardless of how they have handled XRP relations in the past. When the market makes a bullish turn again, Coinbase is in position with the perfect lure to drum up user excitement. As burned out as investors are when it comes to the Coinbase/XRP pairing, there is no doubt that anyone wants to miss the gain in price when the currency is finally listed.
Appreciation in a Bullish Market
The entire industry of cryptocurrency is suffering from a bear turn in the market and prices that have plummeted 70-90%. Since reaching January’s Coinbase driven high of 3.80 USD, Ripple has struggled to trade in the 0.50 to 0.55 USD range, constituting an 85% decrease in value. However, we all know that the cryptomarkets can turn in the blink of an eye. Today’s bear market could be tomorrow’s missed dip. While it’s never good to invest through FOMO or emotional decision making, consider that the market is likely to turn in the positive direction at some point this year. We have already seen a steady attempt to breathe life back into prices, with Bitcoin, Ripple and most of the market fluctuating between gains of 10%. If cryptocurrency was able to reach a market capitalization of nearly 1 trillion USD at the beginning of this year, it’s likely to return to at least a 500 billion market cap before the end of the year (and possibly much sooner).
Coins in the top 10 are going to be the surest bet. While Ripple may not offer an appreciation value to create overnight millionaires, it still has a lot to offer in value. If XRP can climb back to even half of its last all-time high value, that constitutes nearly a 300% return from today’s prices. Most of the currencies on the market are going to experience a similar buoying effect as they creep back to pre-market collapse prices. The coins that have lost the most in value since that time also have an investor price baked into the current iteration: i.e., it’s going to be easier for Ripple to reach its last all-time high than for similar currencies to double theirs.