With bitcoin (BTC) and ethereum (ETH) hogging the spotlight lately, Ripple-affiliated XRP is showing off in its own right. The No. 3 cryptoasset by market capitalization almost doubled in the past week and is the best-performing coin among the top 30 tokens by market capitalization in a month.
At the time of writing (17:17 UTC), XRP trades at USD 0.55 and is up by 22% in a day and by 93% in a week. The price rallied by 109% in a month and 138% in a year, flipping tether (USTD) and becoming the third-most valuable cryptoasset again.
Last time XRP was above the USD 0.50 level was November 2018.
In comparison, BTC trades at USD 18,384 and is almost unchanged in a day. It’s up by 10% in a week, 40% in a month and 160% in a year.
Also, the number of new XRP accounts created in the last 24 hours outpaced any other stretch in the last 18 months.
As economist and trader Alex Krüger recently argued, “[altcoins] usually move in the *same direction* of bitcoin, but more (in both directions)” and you “can think of [altcoins] as leveraged bitcoin plays.”
Krüger in a tweetstorm invoked Newton’s second law of motion, equating BTC to a “heavy rock” and altcoins to “pebbles.” Given its bigger market capitalization, BTC requires greater amounts of capital in order to move the price needle, while a mere ripple effect (no pun intended) could send altcoin prices soaring.
Today, the 24-hour XRP trading volume reached almost USD 11bn (up from around USD 1bn in the beginning of November), compared with BTC’s USD 28bn, according to Coinpaprika data.
Krüger added that since 2018 periods of decorrelation between bitcoin and altcoins has been the exception, not the rule. He said that the market dynamics were different prior to 2018, pointing to BTC/XRP as an example.
XRP price chart:
The trader went on to warn that while correlations are real, they are also prone to being broken, as was the case in October 2020. When it inevitably happens, it can be “very painful for the very many with altcoin allocations,” he noted, predicting that BTC/altcoin correlations will ultimately reverse with the possible rise of a bitcoin ETF (exchange-traded fund).
Meanwhile, in early November, veteran trader Peter Brandt characterized the BTC/XRP performance as a “dead count bounce after “32 straight red days.”
Also, a recent report by authors from the Imperial College of London and the UCL Centre for Blockchain Technologies indicated that more than 94% of transactions on the XRP Ledger, an online system for payments, had “no economic value.” As reported, in September, the XRP Ledger Foundation was launched in order to “accelerate the development and adoption of the decentralized XRP Ledger.”
A friend (previously no coiner) just texted me asking what’s up with $XRP
— target (@newATH_)
@Naturalmed777 Sounds sustainable
— Richard Hilger (@richardhilger)
@bgarlinghouse The U.S regulators are extremely slow at giving XRP regulatory clarity. The U.S have until May 2021… https://t.co/ONcC2YjvqQ
— ༜༝ ⚡ (@XRP_stuart)
@FelixOHartmann @mrjasonchoi Ok, so they’re back. But for how long? Sustained? Not? Will they bite on Defi?
— Nick Yeates (@nyeates)
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