XRP is one of the most controversial cryptocurrencies since its inception by Ripple Labs in 2012. Its close association with traditional finance has alienated parts of the crypto community. However, due to its fast and cheap transactions, it has gained a loyal following. This guide to XRP price prediction examines coinAusblick using technical analysis methods.
What is XRP?
XRP is a cryptocurrency created by Ripple Labs to facilitate fast cross-border payments through the Ripple payment network. Ripple Labs founders Arthur Britto, David Schwartz, and Chris Larsen developed it to overcome the scalability issues of Bitcoin while enabling seamless transfers between different currencies. Key features of XRP include:
Speed - XRP transactions settle in 3-5 seconds, making it much faster than Bitcoin's over 10 minutes.
Low costs - XRP transaction fees amount to only a fraction of a cent, making it affordable for micro-payments.
Fixed supply - The total supply of 100 billion XRP was created at inception, in contrast to Bitcoin's limited emission schedule.
Bank partnerships - Ripple has partnered with over 300 banks and financial institutions to utilize XRP for settlement.
Controversies
XRP has been embroiled in controversies ranging from centralization to securities classification. XRP is designed for use by financial institutions but is publicly traded on exchanges. Its acceptance rate is likely to be significantly influenced by the outcome of Ripple's ongoing SEC lawsuit.
Factors Affecting XRP Price
Numerous factors influence XRP prices, leading to high volatility:
Ripple corporate developments and XRP regulatory status - Ripple's partnerships, service offerings, and legal issues have significant impacts on XRP's price movement. For example, the U.S. Securities and Exchange Commission's assessment prevented the asset from reaching new all-time highs during the 2020 and 2021 crypto bull markets. Now that Ripple has won the lawsuit against the SEC and a U.S. judge has ruled that XRP is not a security, new all-time highs could be reached in the next upward cycle.
Market trends for cryptocurrencies - Like most altcoins, XRP's price tends to follow overall Bitcoin price movements. When Bitcoin rises or falls strongly, so does XRP. Bitcoin itself has had challenges recently as the U.S. Federal Reserve raised interest rates.
Mainstream adoption - Increasing transaction acceptance of XRP by banks and payment providers would create real utility and boost prices. However, it faces strong competition from private blockchains.
Decentralization efforts - Reducing Ripple's control over XRP supply and the ledger through further decentralization could enhance the appeal and value of XRP to the crypto community.
Burn rate - Ripple regularly burns XRP supply to control circulation. Higher burn rates reduce available XRP, which can have a positive impact on prices.
XRP Price History
XRP's price development has been determined by significant announcements, partnerships, and controversies.
2012-2014: The early years - Initially, XRP traded for fractions of a penny. Prices remained relatively flat between $0.002 and $0.02 as Ripple focused more on building partnerships than trading.
2017: Peak of the crypto bubble - As the crypto frenzy reached its peak in late 2017, XRP saw massive speculative gains, soaring from $0.006 in April to an all-time high of $3.84 in January 2018 - an incredible return of 63,000% within 9 months! However, this meteoric rise was driven more by hype than fundamentals. XRP crashed alongside Bitcoin's collapse, plummeting over 90% within a year from its peak.
2018-2020: Building products - Between 2018 and 2020, XRP held up better than most altcoins, trading between $0.20 and $0.60 as Ripple doubled down on establishing real-world utility. Key developments included:
- Ripple introduced On-Demand Liquidity (ODL), which allows financial institutions to use XRP for instant cross-border payments.
- Over 300 banks joined RippleNet to connect payment channels worldwide.
- Remittance companies, including MoneyGram, began using ODL for money transfer, indicating potential future adoption of Ripple's offerings.
2021-2022: Legal troubles and a bear market - After a strong start to 2021, with XRP once again surpassing the $1 mark thanks to the resurgence of cryptocurrencies, Ripple was hit by an SEC lawsuit in December 2020, claiming that XRP was an unregistered security. Many exchanges delisted XRP, and the price plummeted due to negative sentiment. XRP failed to reach new all-time highs while Bitcoin, Ethereum, Dogecoin, and several others did. Each of these other cryptocurrencies reached their peaks during this time and entered a bearish market in 2022, reducing the chances of XRP's recovery throughout the year.
Current XRP Price Action
2023 has been a challenging year for most cryptocurrencies, just starting to recover from the long crypto winter. However, XRP has outperformed most cryptocurrencies as Ripple has won its legal battle with the SEC. A U.S. court ruled that XRP is not a security when sold to retail investors. This resulted in several exchanges relisting the asset, and prices surged from below $0.50 to $1 within 48 hours of the decision. The SEC plans to
