Bitcoin has been the dominant story here at Market Watch for what feels like months. And for good reason. The performance of BTC has outperformed pretty much every asset an investor can get their hands on. But this week a different story is emerging.
XRP, the oft-maligned cryptocurrency has been on a charge recently. As crypto hit a purple patch in late summer, Ripple’s cryptocurrency has quadrupled, reversing a two-year cycle of declining prices.
At the time of writing, XRP stands at $0.70, which is a far cry from its all-time-high price of $3.30 achieved in 2018 but has regained its spot as the world’s third-largest cryptocurrency by market cap. What gives? There are two main reasons.
The first is that XRP, like most other cryptocurrencies, have benefited from renewed interest in alternative assets like crypto as traditional ones like stocks and shares have taken a pummeling thanks to COVID.
The second is XRP’s standing as a cryptocurrency that has looked and felt the most familiar to what currently exists in the financial world. It is currently used by more than 350 financial institutions worldwide and has the first-mover advantage over rivals UBS and PayPal in using blockchain to reduce the cost and increase the speed by which money moves across borders.
It’s use-case as a permissioned blockchain where networks can be built according to the builder’s instructions has caught the eye of central bankers looking to join the state-backed digital currency race.
Over 70% of the central banks around the world are looking at deploying #CBDCs – and one thing that's crystal clear is the importance of interoperability. If you’re not prioritizing this, you’re just rebuilding the same siloed system. https://t.co/AZdS5YBU8K
— Brad Garlinghouse (@bgarlinghouse) September 24, 2020
Which is why XRP has been actively recruiting for a head of its central bank engagements division designed to woo central bankers into using the permissioned blockchain to help build the pipes these currencies would run on.
On top of that, the fog around regulation for cryptocurrencies appears to be lifting, after the US Treasury Office moved to ban discrimination against crypto firms, earlier this month. This means crypto firms like XRP will be given access to banking services that have often hobbled projects’ attempts at providing products and services that could increase adoption.
In conclusion, the world is changing its mind about crypto and XRP is reaping the benefits.
Stellar and Bitcoin Cash rack up double-digit gains
But it wasn’t just XRP that has been in party mood. Stellar and Bitcoin Cash have also racked up double-digit gains in the past 24 hours. Stellar saw a 47% increase overnight, taking its weekly gains to 104%, while BCH added 19% to its value.
All these upswings have eaten into Bitcoin’s dominance, which had been sitting around 65% over the last few weeks. Today Bitcoin’s dominance is a smidgen above 60% which is a demonstration that crypto isn’t as reliant on Bitcoin to drive growth. With Ethereum gearing up for 2.0, XRP offering central banks a way into crypto and others increasingly showing their utility, alt-season is in full swing.
The good times are being felt on Wall Street, too. As COVID vaccines race through regulatory approval, the Dow Jones Industrial Average is edging ever closer to the mythical 30,000 mark, which would be a fresh record.
Markets are being nudged higher by the pincer movement of a new vaccine and Trump’s begrudging acceptance that Biden is now in charge. Biden’s pathway to the Presidency was broadened yesterday after the General Services Administration acknowledged he was the winner of the US election.
It seems even Trump has got into the spirit of Thanksgiving.
