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Chad Steingraber Explains Why XRP Lags despite Ripple’s Partnerships

Steingraber stated that while the price of XRP is currently determined by supply and demand on exchanges, traditional finance institutions such as Bank of America are restricted from using the asset due to regulatory requirements

Chad Steingraber, a professional game developer has provided explanations why XRP, the cryptocurrency associated with Ripple Labs Inc, is underperforming despite recent partnerships and payment utility.

XRP’s Trading Volume Decreases

As of the latest CoinMarketCap data, XRP is trading at $0.4924, representing a 1.7% increase in the past day, with its market capitalization standing at $27 billion. The trading volume is down by 34.9% to $1.5 billion, indicating dwindling interest from investors.

According to Steingraber, one main reason for XRP’s underperformance is that the cryptocurrency is primarily traded Over-The-Counter (OTC) rather than on public exchanges such as Binance Holdings Ltd and Kraken.

Steingraber stated that while the price of XRP is currently determined by supply and demand on exchanges, traditional finance institutions such as Bank of America Corp (NYSE: BAC) are restricted from using the asset due to regulatory requirements. Thus, they engage in OTC for XRP trading.

He, however, noted that XRP price will begin to surge when demand from businesses increases. He painted a scenario where firms will start accumulating more XRP from any available source, including public exchanges fueled by an increase in demand.

Besides the influence of XRP’s utility, Steingraber pointed out investment through Exchange-Traded Funds (ETF) as a key factor that could influence the price of the cryptocurrency. According to him, investment activities beyond Ripple can remove XRP from public supply, further affecting its price.

Steingraber concluded that an outstanding price uptick for XRP would occur when public supply completely depletes due to increased demand from businesses and traditional financial firms.

What Makes Ripple Labs-backed XRP Stand Out

XRP primarily functions as a bridge currency, providing financial institutions with a more cost-effective way to trade crypto and fiat currencies. Ripple Labs’s selling pitch for XRP has always been the low transaction costs and speedy settlement status.

The network’s minimum transaction cost for a normal trade is 0.00002 XRP. Another unique feature of XRP is its scalability, which allows for 1,500 transactions per second. This is in addition to its inherent green characteristics, which make it carbon-neutral and energy-efficient.

In a positive development for XRP, Brad Garlinghouse, Ripple CEO expressed optimism regarding the potential launch of an XRP ETF. He cited the recent approval of spot Bitcoin ETFs by the United States Securities and Exchange Commission (SEC) as a signal of the possibility of additional ETFs entering the market.

Meanwhile, the ongoing legal battle between Ripple and the SEC has taken a new dimension, with the exchange’s legal team citing comparisons with the Govil case, as previously reported by Coinspeaker. Experts claim that if Ripple can demonstrate that no institutional investor suffered financial loss during the sale of XRP through its On-Demand Liquidity (ODL) platform, the Second Circuit’s stance on Govil bodes well for the defense of the payments firm.

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