Ripple price 2018: Why is it rising? Should you buy Ripple instead of Bitcoin?
RIPPLE prices have soared in the past month, helping it usurp ethereum as the second biggest cryptocurrency on the market after bitcoin. But why is Ripple rising and should you invest in XRP over bitcoin?
Ripple’s value has skyrocketed by more than 1,000 percent since the start of December 2017, according to Coin Desk, when it was trading at about 18p ($0.24).
At the start of 2017, one Ripple (XRP) token was worth just $0.006. As of Thursday January 5, the token’s price on CoinMarketCap is £2.51 ($3.40).
Ripple’s staggering rise has led to speculation that it could start bearing down on crypto juggernaut bitcoin, which has stalled in recent weeks.
Why is Ripple rising?
There are a number of factors that could have helped Ripple boom since the end of last year.
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Trevor Koverko, CEO of blockchain platform Polymath, believes investors are choosing to back Ripple because they trust the brand.
He told Forbes: "People feel comfortable with its name and the technology behind Ripple.
"A lot of people are beginning to realise how big of an opportunity there is between business and the blockchain...and that's making Ripple the early winner here."
The Asian market is also thought to have given XRP a huge boost. Alexey Ivanov, CEO and co-founder of Polynom Crypto Capital told Forbes: "Asians are going mad for Ripple.”
Read more: WHAT IS RIPPLE?
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Ripple was founded in 2012 with the aim of helping banks and businesses seamlessly send money all over the world.
People feel comfortable with its name and the technology behind Ripple
The Ripple Network allows transactions to be processed and completed in seconds, where a standard bank might take days.
The service also charges an extremely low transaction fee for cross-border payments (0.00001XRP) compared to banks.
In November 2017, US banking giant American Express announced that it will be partnering with Ripple to send money across the Atlantic to the UK.
The deal thrust Ripple into the mainstream and helped establish it as a reliable financial source.
Should you buy Ripple instead of Bitcoin?
While Ripple has dramatically increased in value in the past 12 months, it remains to be seen whether the prices will hold in the long term.
XRP has picked up a lot of momentum since securing the American Express partnership and has since struck deals with Santander and the Swiss UBS.
However, it is nowhere near as valuable as bitcoin, which still sits at nearly £12,000 ($15,500), according to CoinMarketCap.
Critics have also questioned the fact that, unlike bitcoin, XRP tokens are not “mined”. The token’s creators instead have full control over the token – all 100 billion of them.
Stephen Powaga, head of research at investment firm Blockchain Momentum, argued that this could be cause for concern in regards to inflation. Ripple’s team can release up to one billion tokens a month.
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He said: "It's somewhat concerning for me because if they chose to release them as quickly as possible, within a little over four years, you'd see more than a doubling of supply of ripple.”
Ripple does still outdo bitcoin when it comes to transaction speeds and CEO Brad Garlinghouse has argued that the cryptocurrency market is big enough for bitcoin, XRP and ethereum.
Speaking to Fortune Magazine in October, he said: “In 2017, people have realised there isn’t going to be one crypto to rule them all.”
“You’re seeing vertical solutions where [Ripple] is focused on payment problems, Ethereum is focused on smart contacts, and increasingly bitcoin is a store of value. Those aren’t competitive. In fact, I want Bitcoin and Ethereum to be successful.”
