Why is Ripple Surging?

Why is Ripple Surging?

By Benson Toti - min read
Updated 21 March 2023

The market is exploding once again. All except four top 100 coins have made gains from as little as 0.95% to as much as 100% as in the case of Bitcoin Private. How long the rally will last is anyone’s guess.

But one of the more notable gainers is Ripple. Currently ranked third by market capitalisation, the coin is now trading at 65 cents after jumping more than 17% in the last 24 hours. It is one of the top performers among the top 10 coins coming only second to IOTA. Its market capitalisation now stands at $25billion.

Ripple has invested $25 million in Omni

Make no mistake. Ripple has made one of the hardest falls since the cryptocurrency slump started early February. From $3.83 a unit when it was at its peak in January, Ripple has lost more than 80% of its value.

The current uptick is no doubt a big relief to investors still holding it.

So what is exactly is propelling the value of Ripple?

Well, a number of factors are at play. We must remember that MoneyGram announced a partnership with Ripple in January. One of the largest payments network, MoneyGram would test the viability of Ripple’s payment transfer solution. Western Union, another payment provider followed soon after.

Positive News

Ripple Foundation has been very active of late in trying to promote Ripple use cases. Just this week, it announced a donation of $25 million worth of Ripple to Blockchain Capital, an investment fund supporting blockchain start ups.

Less than two weeks ago, Ripple made a surprise announcement it was funding all classroom projects posted on a crowd funding site.  The donation is worth $29 million.

Of course, these actions might not have a direct bearing on the market but its boosts Ripple’s reputation and standing.

Real Driver

But the real driver behind Ripple’s renewed momentum is the launch of Santander’s One Pay FX platform. Although not directly linked, the system was created by Ripple’s creator. The system will be used to make cross-border payments possible.

Santander

The Ripple network is built to enable real-time payment transfers and more targeted at financial institutions. It has so far been tested by dozens of banks in South Korea and Japan as a possible replacement to the slow SWIFT system.

While Ripple has lost more than 80% of its value in January, the drop is easily erased by the fact that it gained more than 36,000% in 2017 alone.

General Upward Trend

Ripple’s value is, of course, riding on the general upward trend in the market. Total market capitalisation now stands at $327 billion at 16.28 GMT, after adding close to $30 billion in the last 24 hours.

No one particular reason can be attributed to the uptick. There is the very possibility of a large institutional investor entering the space.

The market is still small compared to other established markets and substantial inflows can affect the market.

Possible Listing on Coinbase

There is, of course, the rumour that Ripple may be listed on Coinbase. The two companies have already held talks on the issue but there is no news yet.

In the meantime, Ripple has been keen to make a point that it is not a security. Coinbase only lists Bitcoin, Bitcoin Cash, Litecoin and Ethereum, generally not regarded as securities.

Coinbase is a member of CryptoUK

Meanwhile, there has been some positive activity in Japan, a major trading hub that may be boding well for the market.

Large financial institutions are buying up cryptocurrency exchanges as they position themselves to reap from the lucrative market. The latest is Yahoo Japan reported to have acquired BitArg Exchange.

Monex Group recently acquired Coincheck, the troubled exchange that was hacked in January. Mitsubishi UFJ Financial Group, the biggest financial firm by assets under its management has similar intentions.

There is also the fact that cryptocurrencies are being seen as an alternative store of value. The stock market isn’t that strong at the moment and investors are looking for alternatives.

Could the prolonged slump be coming to an end? The coming days and weeks will give us more answers.