Cryptocurrencies slid sharply on Musk’s tweet about the suspension of car purchases using bitcoin, but XRP/USD has recovered from $1.2053 to $1.3237.
Ripple’s XRP Cryptocurrency Falters on Musk’s Tweet
Elon Musk’s tweet on suspending Bitcoin for car purchases was based on environmental concerns and the increasing use of fossil fuels for mining Bitcoin. It created a huge stir in the crypto world as most currencies saw a sharp slide on Wednesday and Thursday, May 13 and 14. However, almost all cryptocurrencies have recovered during trading hours on Thursday.
XRP is an environmental-friendly cryptocurrency that avoids mining processes. It does not leave an enormous carbon footprint like BTC and ETH.
Ripple’s XRP Cryptocurrency Remains Volatile
Ripple’s XRP fell to $1.20 on Elon Musk tweeting that he would suspend car purchases using bitcoin. The XRP/USD saw a huge crash on Wednesday, by almost 15%, but has recovered significantly on Thursday, May 14, 2021.
Ripple’s XRP started the year 2021 at around $0.22 and has gone up more than 500% in five months, despite the company facing legal woes. XRP reached a record high of $1.96 on April 14.
XRP/USD fell to almost $0.10 in March 2020, at the beginning of the pandemic but moved higher to $0.77 in November 2020. But with the SEC filing in December, it once again moved lower to $0.15. However, in February 2021, it surged to a lifetime high of $1.96.
In 2021, XRP has remained strong, moving to almost $2.0 in April 2021, after the woes of SEC filings in 2020. However, the recent tweet from Musk has impacted the crypto market, as major cryptocurrencies saw a huge crash in prices.
XRP was at its highest value on April 14 at $1.9633 but fell to almost $0.9444 on April 23. On Wednesday, it crashed almost 15%.
Ripple Provides Ease of Money Transfer
Ripple was the fourth-largest cryptocurrency, trailing behind bitcoin, ethereum, and binance coin. However, its ranking has dropped to the seventh position.
XRP has gained fame for enabling cross-border transactions and avoidance of fees. There are a finite number of around 100 billion coins. As the XRP token is not required for each transaction, it is generally accepted by institutions and banks. It uses Blockchain technology to help in transferring money from one bank account to another and from one individual to another.
Ripple was launched to compete with Bitcoin. But, it was sued by the Securities and Exchange Commission in December for conducting a $1.38 billion unregistered offering between 2013 and 2020. The SEC has asked foreign regulators for more information on XRP and Ripple.
Ripple has acquired 40% of Tranglo, for cross-border payment leader in Asia. It will help to expand the On-Demand Liquidity (ODL) services to serve its growing customer base.
SEC Filing on Ripple Cryptocurrency
Ripple Labs faces many issues from the Securities and Exchange Commission (SEC). The decentralization of the currency is still under consideration as the company can manipulate the value of the XRP in the market.
XRP lost almost 50% of its market value after the SEC filing. Investors lost billions of dollars when the value of XRP slumped lower. The market havoc caused severe panic among users. However, XRP states that there are no allegations of fraud or misrepresentation as the virtual currency is outside the jurisdiction of the SEC. It has not entered into a contract with any XRP holder for investment purposes.
Companies like PayPal, Square, and Tesla have supported the use of cryptocurrencies. Family institutions and hedge funds are also showing interest in cryptocurrency. Investment banks such as JPMorgan and Morgan Stanley are offering access to bitcoin funds to their clients. The crypto market has gained acceptance from every sector. However, some fund managers believe that cryptocurrency is a bubble that will break soon.
In April, Coinbase, the cryptocurrency brokerage was listed in the US stock exchange and has wooed more retail investors into the crypto market. It is the biggest digital currency exchange on the market and has one of the biggest IPO’s.
Despite the ongoing lawsuit, Ripple tokens continue to soar. On the day that Coinbase was listed, Ripple fell to almost $1.10 prices. Tokens like Ripple are easily acceptable say, analysts. Though the legal battle is raging on, XRP has moved to new highs. XRP trades with large swings and remains volatile. The only concern is the legal battle that it faces with the SEC.
Bitcoin is the world’s largest cryptocurrency with a market capitalization of almost 1 trillion, while XRP has around $55 billion.
Bitcoin fell from $58,000 to $46,500 in just two days, as investors reacted sharply to the tweet by Elon Musk.
Ethereum is the second-largest digital asset with a market capitalization of $266 billion. It slid from $4,350 to $3,820 on Wednesday.
Dogecoin has a total value of around $84 billion and has moved lower from $5,190 towards $3,550 within two days, May 13 and May 14.
XRP will be a good investment whenever it moves below $1.0, say experts. XRP is most useful for institutional investors than for personal investment.