With a (current) market cap of 10 billion dollars, XRP is the fourth biggest coin on the market. But when we look at the cost of one XRP, we can immediately see that the price is way lower than that of one bitcoin. How come these prices differentiate so much? When we take a look at the number of coins in circulation, we can see that Ripple has almost 45 billion coins in circulation, whereas Bitcoin is capped on 21 million units. Factors such as coins in circulation, positive news and supply and demand have an incredible effect on a currency such as Ripple.
Ripple price history
The unit itself is most commonly referred to as XRP and the company behind the token is called Ripple. A fun fact about Ripple (XRP) is that it is one of the oldest cryptocurrencies on the market. Ripple distinguishes itself by primarily focusing on the financial industry. Ripple wants to be the crypto-bridge between banks and customers, and Ripple wants to do that by making financial transactions easier. But how did the price of XRP develop during its initial years? Let’s have a look at the history of Ripple.
1: The bridge between financial instutions
Before the whitepaper of Bitcoin was written, Ripple had already laid down its foundation with the Ripple concept. Let’s go back to 2005, when Ryan Fugger launched Ripplepay. At that time, the true concept of blockchain was not yet invented although the concept of ‘mutually co-operating systems’ were already abound. No, the initial idea behind Ripplepay was to have a network of financial relations that would replace banks.
Let’s jump forward to the year 2011. In 2011, Jed McCaleb, Arthur Britto, and David Schwarts were enamored by the concept of Bitcoin and started to put two and two together. The founders wanted to use Ripplepay for their digital currency network. Subsequently, they decide to change the name of the company to Opencoin. However, one year after the launch of Opencoin, the founders decided to change the name to Ripple.
2: First transaction
The first Ripple transaction was in July 2013 and started with a value of $0.005 per XRP. Seeing that the first transaction was a success, all lights were green and investors started getting interested. The price started to increase almost immediately. In September, just two months later, XRP reached a value of $0.01 and gradually increased throughout the months that followed. At the end of the first year, XRP had a value of $0.06
3: All-time high price
2017 marked a milestone year for cryptocurrency history. This was also the case for Ripple. In 2017, Ripple reached a total market cap of 1 billion dollars. During the year, the price of XRP kept increasing resulting in an all-time high price of $3,47 per XRP unit.
4: After reaching its all-time high price
After reaching its all-time high price the price of XRP stabilized. Up until now, the price did not have enormous fluctuations. It did however had some minor increase at the end of 2020, when the entire crypto market resurged after a two year slumber.
How is the Ripple Price influenced?
We have seen before that the enormous amount of circulating XRP have a significant influence on the price. There are, however, other factors that could influence the price such as media attention and Ripple’s competitors. In the next paragraphs, we explain these two factors a bit more.
As with any other cryptocurrency, certain news can influence the price of Ripple. So how does it work? Simply put, it means that when there is positive news about Ripple, the price will probably increase. On the other hand, negative news about Ripple could result in a decrease in the price. A big example of this is the announcement of partnerships with Ripple. On the other hand, news of impending lawsuits can cripple the price of XRP. Additionally, when big companies purchase XRP, it will have a significant positive effect on the price. Examples of big companies that are using the platform of Ripple are American Express, Banco Santander, MoneyGram International, and Deloitte. As a result, certain partnerships or purchases generate trust with the common people.
The crypto market keeps growing and growing and more people want to join. This also means that more competitors want to compete in the market. Competitors who perhaps have the same goal as Ripple and want to do them better. Competition always has an effect on the price. When we take a look at the current market, Ripple is the fourth biggest coin on the market. It gained this position by being one of the first crypto’s with the goal of bridging financial institutions. XRP was a lot faster than its competitors in that regard.
Looking at the how the price develops throughout the year, we notice that almost all coins follow the same price movements, after its initial early stages. When the price of other coins besides Bitcoin rise, everyone tends to follow. This is commonly referred to as ‘Altseason’. All coins have an effect on each other when that happens.
BTC - €15,900
ETH - €497.46
XRP - €0.527
LTC - €71.37
Future of Ripple price
It is difficult to predict what the price of Ripple (or any crypto) will do in the future. However, the upcoming year will be crucial for Ripple. Will certain partnerships come through? Will the negative news regarding the American SEC impact it heavily? Only time will tell. With its fast and cheap transactions, Ripple will always be an desirable product. Let’s see what effect it will have in the future.