The sudden gains recorded in the cryptoverse has brought a notable crypto asset to the limelight. Data from Coinmarketcap shows that Ripple (XRP) has seen a price rise of over 30% from $0.19 to $0.244 in the last 14 days.
XRP outpaced Tether to become the third most valuable crypto asset in dollar terms, at around $11 billion. Its trading volume was about 1.6 billion at the time this report was written.
There is no clear reason behind this surge, but Nairmetrics, through its data feed, observed few whales increasing their stakes in the digital coin astronomically, even as XRP reclaimed the number three spot from Tether.
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Consequently, since July 18, the number of wallets holding 1 million to 10 million XRP has been steadily increasing. Roughly 30 new whales have joined the platform, representing a 3.7% increase in a short period.
In addition, Ripple’s Director of Product, Craig DeWitt, revealed a P2P payment platform built on XRP, thereby increasing its importance in the area of peer to peer payment.
Why are whales buying?
Economic historian, Barry Eichengreen, recently explained that cryptos should not just be considered for speculative reasons, as leading crypto assets have shown characteristics of being tangible assets. He said:
“I don’t think that thinking about crypto as speculative investments is really a long-term viable business model. Speculative investments have come and gone throughout history. Tulips came as a speculative investment and they went. [Digital assets] that provide actual tangible services like cross-border payments are the ones that are likely to have legs.”
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Barry went on to explain why cryptos have become the new digital gold, saying:
“Gold doesn’t really have any intrinsic value. People [believe] it will hold its value because other people value it. There is, from that point-of-view, a parallel with cryptocurrencies. People pay actual U.S. dollars for it because they think other people will value it and pay actual U.S. dollars for it.”
Quick fact: Ripple (XRP) plays dual roles as a payment platform and a currency. The platform is an open-source platform that is created to allow quick and cheap transactions.
Unlike its crypto rival, Bitcoin, which was never intended to be a simple payment system, Ripple has gained the attention of major global banks such as Standard Chartered and Barclays for international transactions worldwide.