Over the past 24 hours, the price of Ripple’s native cryptocurrency XRP has increased by more than 18 percent, recovering back to $2 after dipping below $1.7 during a major cryptocurrency market correction that occured on January 11.
Analysts have attributed the recent increase in the value of XRP to the newly established strategic partnership between Ripple Labs and MoneyGram, one of the largest remittance companies in the global industry behind Western Union, the $9 billion remittance giant.
With a market valuation of just under $700 million, MoneyGram operates a major remittance network with around 350,000 agents, processing payments for tens of millions of users on a regular basis.
Earlier today, as CCN reported, Ripple CEO Brad Garlinghouse announced that MoneyGram will begin using Ripple’s blockchain network and its cryptocurrency XRP to process international payments.
“The payments problem doesn’t just affect banks, it also affects companies like MoneyGram, which help people get money to the ones they care about,” said Garlinghouse. “By using a digital asset like XRP that settles in three seconds or less, our clients can move money as quickly as information.”
Alex Holmes, chief executive officer of MoneyGram, explained that the company will begin using Ripple’s blockchain solution xRapid, a service developed specifically for payment providers and other financial institutions for liquidity cost reduction, to seamlessly process payments for its global customer base.
The announcement of MoneyGram immediately led to the surge in the value of Ripple. Prior to the January 11 correction, the market valuation of Ripple remained below $67 billion. The partnership between Ripple and MoneyGram added a staggering $13 billion to Ripple’s market valuation, allowing RIpple to recover to its previous levels.
Since CoinMarketCap had removed the trading prices of the South Korean cryptocurrency exchange market, the price and the market cap of Ripple have struggled to recover. From $147 billion, within one week, the Ripple network’s market valuation fell by over $67 billion, an unprecedented drop in market cap in the cryptocurrency market.
In late December, Ripple had demonstrated a meteoric rise in value, overtaking the Ethereum network in market valuation and appealing to the South Korean exchange market with its cheap tokens. Regardless of the market valuation, which is the accurate depiction of the value of a cryptocurrency, casual traders and newcomers tend to consider the price of the cryptocurrency more than the market cap.
Thus, for the majority of investors that are new to the space, a $3 token of XRP seems substantially cheaper than the $300 Litecoin, even if the Ripple network is significnatly larger than Litecoin by market cap. The advantage of having cheap tokens led the South Korean exchange market to drive the price of XRP up by massive margins.
In the South Korean exchange market, regardless of the recent cryptocurrency trading ban fiasco, XRP is being traded at nearly $3. The demand for Ripple has increased over the past two days, largely triggered by the long-term plan of MoneyGram to utilize XRPs in processing international payments.
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Featured image from Shutterstock.
Last modified (UTC): January 12, 2018 13:50