Just in time for Black Friday, the prices of cryptocurrencies went south. Ripple couldn’t save itself from that either with its native cryptocurrency XRP fell by more than 25%. Was that just a necessary correction or is XRP still going downhill? Institutional investors may be waiting to get into XRP
Correction catches Ripple (XRP)
There was finally a correction that many had been expecting for weeks. The Bitcoin price plummeted by around USD 3,000 and tore all Altcoins to the ground.
This is because of high dependency of altcoin prices on the Bitcoin. As a rule, altcoins suffer far more than Bitcoin itself. This to applies to XRP. But one must not forget that the Ripple price has increased significantly in the last few weeks and recorded an increase of around 150%.
Institutional interest In XRP?
Ripple and XRP have come back to life after a long dry spell and Brad Garlinghouse, Chief Executive Officer of Ripple, sees the opportunity for XRP. According to him, the increasing interest of institutional investors could also affect XRP. But mainly he speaks of the fundamental interest of institutional investors in cryptocurrencies.
In a series of tweets, Garlinghouse said that the rising interest of institutional investors in Bitcoin is primarily its nature as a store of value. Bitcoin is, according to him, an “extremely useful inflation hedge”.
The CEO of Ripple of course took advantage of the opportunity to point out the properties of XRP. He highlighted the fast and inexpensive transactions of XRP.
Never a dull moment in crypto! Institutional investor interest is skyrocketing… industry growth comes down to real world utility. As a store of value, BTC is an extremely useful inflation hedge. XRP’s speed, cost and scalability make it extremely useful for payments. (1/2)
— Brad Garlinghouse (@bgarlinghouse) November 19, 2020
Institutional investors focus on Bitcoin
All projects hope for money from institutional investors. But not everyone gets a piece of cake. This is what it looked like with XRP. Probably the biggest news of the last few months was Bitcoin integration with PayPal.
PayPal has integrated 4 crypto currencies and completely left out XRP. It is not possible to say exactly what the reasons were. It could have something to do with the legal uncertainty surrounding XRP in the US.
But not much came from Grayscale and Co. in terms of XRP in the last few weeks. The situation is similar for listed companies such as MicroStrategy and Square. They only invested in Bitcoin. The interest in XRP is currently limited.
Therefore, there is currently no need to hope for increasing interest in Ripple and XRP from institutional investors.
Ripple still owns 55% of all XRP
Of course, the direction in which the XRP price will move cannot be precisely predicted. The dependency on the Bitcoin rate is very high. However, the surge in XRP in the past few days may have created momentum that could result in another positive move.
Few beginners to Ripple know that Ripple’s main source of income is the sale of its own XRP tokens.
When XRP was created Ripple got 80% of all XRP tokens back then and still holds around 55%. Hence, investors can expect the company to continue to throw their XRP into the market over the next several decades. Although this happens in small tranches, but still creates a large selling pressure.