Ripple’s XRP Sinks Below $1 After India Announces Ban Plan
Major cryptocurrencies are having a jumpy start to 2018. Ripple’s XRP fell below $1 for the second time this year today, leveling out at $0.984, according to data from Markets Insider, due to announcements by the Indian finance minister saying the government does not consider cryptocurrencies to be legal tender today.
The country’s finance minister Arun Jaitley’s announcement that the Indian government will take all measures to eliminate the use of these crypto-assets in financing illegitimate activities or as part of the payments system, put most cryptocurrencies under pressure.
Ripple jumpy after steady 2017 growth
The decline in XRP’s price in January came after 12 months of continuous growth for Ripple. The token’s price jumped more than 35,000 percent from $0.006 at the start of 2017.
The collapse on January 4 was blamed on the announcements of the South Korean Government, repeatedly threatening to ban crypto trading.
Most major cryptocurrencies, apart from Etherum, have shown extreme volatility so far in 2018, with Ripple's XRP token trading at less than one-third of the high it set just after the new year.
Ripple traded at $1.02 at 15:41 GMT today, gaining strength after the earlier lows.
Many tokens have experienced swings as far as 10 percent either way, in contrast to the previous year marked by steady rises in prices.
On paper, the current price of ripple may not as impressive as Bitcoin’s price of $16,750. However, Ripple’s total market capitalization is now valued at more than $129 billion, according to CoinMarketCap.
Another important factor is the number of both tokens. Currently, there are just below 17 million bitcoins in existence, compared to Ripple’s 40 billion.
Investors are now looking towards the token for potential profit, with the value of Ripple rising more than 1,000 percent since December 2017 up until January 2018.
At the time of writing, XRP is trading at $0.99.
Ripple goes farther back than Bitcoin
Ripple is both a transaction network and crypto token launched in 2012. But Ripple’s history is actually older than bitcoin itself and can be traced back to 2004 when it was conceived by Ryan Fugger.
Ripple’s XRP was created as the go-to cryptocurrency for banks and global money transfers. It is promoted as the fastest and most scalable digital asset for real-time payments anywhere in the world. Ripple’s executives believe its main selling point is its liquidity, speed and low transaction fees.
“The liquidity needs of banks today is managed with literally ten trillion of float that sits in these nostro and vostro accounts. We believe very strong this is an inefficient model. You can use digital assets to fund liquidity, and Ripple is uniquely positioned to capitalise on that," according to Brad Garlinghouse, CEO of Ripple.
“Bitcoin takes four hours to settle a transaction. XRP takes 3.6 seconds,” he said.
Unlike bitcoin, Ripple was never thought out to become a method of payment for online purchases. It was meant to compete with transaction systems such as SWIFT.
Ripple’s price has significantly increased this year, indicating there is a buzz around the token, but it remains to be seen where these prices are headed in the long-term.