Ripple Briefly Overtakes Ethereum as World’s No. 2 Cryptocurrency
Ripple has achieved multiple milestones this week, the latest being a brief stint as the world’s second-largest cryptocurrency by market cap. The altcoin surged more than 30% on Friday en route to new record highs.
XRP Hits New Highs
The XRP/USD exchange rate rose nearly 34% on Friday to reach $1.67, where it was trading near session highs. In the process, Ripple unseated Ethereum as the world’s second-largest crypto. At the time of writing, ether’s market cap was around $70 billion compared with ether’s $73 billion. According to The Wall Street Journal, Ripple’s market valuation now exceeds that of ride-share giant Uber.
The latest gains give XRP a five-day return of more than 50%. The altcoin has added a breathtaking 630% over the past four weeks.
Buying activity has been heavily concentrated in South Korea, where XRP tokens trade at a significant premium. The coin’s 24-hour trade volumes exceeded $5 billion on Friday, with South Korea’s Bithumb processing nearly one-third of the transactions. Nearly $1.6 billion worth of XRP was transacted on the exchange.
Coinone, another South Korean broker, processed more than 7% of the daily transactions. Binance and Bitfinex accounted for 9% and 8% of the daily turnover, respectively.
Ripple’s gains have been more impressive when we consider its performance in the face of multiple broad corrections. The XRP token virtually tread water during repeated downturns before quickly turning up the offensive.
Promise of Instant Settlement
Ripple’s practical use cases have led many to believe that the cryptocurrency is significantly undervalued relative to the broader altcoin universe. Whereas bank transfers can take days to clear, the XRP platform can process similar transactions in seconds. These advantages have landed Ripple some high profile partners, including American Express and a large coalition of Asian banks looking to build a blockchain-powered payment platform.
For banks and other payment providers, Ripple offers near-instant settlement time at a rate that is much lower than conventional methods. Deeper partnerships with traditional finance will likely make Ripple a much more attractive investment for investors who are skeptical about cryptocurrencies.
The token’s success have inspired rumors of its possible inclusion on the coveted GDAX exchange. Coinbase currently lists just four cryptos – bitcoin, Ethereum, Litecoin and bitcoin cash – but is widely expected to broaden this universe as early as next year.
Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.
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