Cryptocurrencies rallied as optimism spread surrounding Ripple Labs’ plans for using a digital coin, lifting peers that have lost more than $600 billion of value since January.
XRP, the cryptocurrency commonly referred to as Ripple, jumped as much as 50 per cent to double its price from a week ago. XRP surpassed Ether as the second-biggest cryptocurrency on the surge, according to CoinMarketCap.com data. The Bloomberg Galaxy Crypto Index increased 15 per cent, heading for its biggest one-day gain since mid-July. Ether and Litecoin were both up more than 8.5 per cent and Bitcoin, the biggest by market value, rose 5.4 per cent.
“When there’s a sharp rise with one of the major cryptos it makes headlines and grabs people’s attention and this could indeed bring some fresh liquidity to the market,” said Matthew Newton, a London-based analyst at eToro, a trading platform.
Ripple Labs may launch a service that will use the digital currency “in the next month or so,” one of Ripple’s executives told CNBC on Monday. Called xRapid, the service lets financial companies such as payment providers speed up money transfers into emerging markets using XRP, which Ripple says is an independent digital asset. A Ripple spokeswoman said Thursday that there isn’t an official commercial release timeline at this point.
Virtual currencies have struggled to gain a foothold among institutions in part because most banks and payment companies experimenting with blockchain technology don’t consider it necessary to use digital coins for the transactions.
While far outperforming bigger rivals such as Bitcoin and Ether this week, XRP is still down by more than 50 per cent from its 2018 intraday high. It was up 44 per cent to 58 U.S. cents as of 10:06 a.m. in New York, according to Bloomberg composite pricing. The value of virtual currencies tracked by CoinMarketCap.com has dropped to $22 billion from about $835 billion at their January peak.
XRP was released on a distributed ledger in June 2012, with 100 billion XRP created before Ripple the company was formed in September 2012. After Ripple was founded, the creators of XRP gifted a substantial amount of it to the company. Ripple owned about 60 billion XRP, with the majority of it held in escrow, as of July, according to information listed on the company’s website.