Ripple (XRP) rose to meteoric heights in December 2017, reaching what some are calling ‘Big Mac’ parity, only to pull back over 80% in January. The market cap now stands US$105.6 billion, with US$2.65 billion in trading volume over the last 24 hours.
XRP the token is a separate entity from other companies with the same namesake, including the banking network RippleNet (originally Ripple Labs), the social network Ripple Works, the advertising company Ripple Media, and the plant-based milk company Ripple Foods.
While XRP aims to disrupt the remittance and cross-border payment industry generally, the main goal of RippleNet is to take on SWIFT, a telecom cooperative created over 40 years ago that is currently used to send secure financial messages between banks. These messages exclude clearing or settlement.
Ripple recently celebrated its fifth birthday, having been created in 2012, and now claims over 100 financial and banking partnerships around the world, most recently with the Saudi Arabian Monetary Authority. However, a Bloomberg article on January 25th suggested banks “have no interest in using XRP.”
The network has an existing supply of ~100 billion, 55 billion of which was placed in escrow in December 2017. By securing the lion’s share of XRP in escrow, anyone can now mathematically verify the maximum supply that can enter the market, and eliminates any concern that Ripple could flood the market. Taking this into account, the circulating supply stands around ~US$46.48 billion.
According to recent Bitmex research, 7 billion XRP was held by Ripple as of January 31st, 39 billion XRP has been distributed, and 55 billion XRP remains in escrow. Distribution and internal holdings have fluctuated over time with supply estimates based on available data from 2013-2015 unable to reconcile “how many XRP were sold, at what price, or how many were given away” according to the research team.
However, Ripple states that market participants purchased US$20.1 million in Q4 2017. These participants tend to be institutional buyers, and their purchases typically include restrictions that mitigate the risk of market instability due to potential subsequent large sales. Additionally, the company sold US$71.5 million worth of XRP programmatically, as a small percentage of overall exchange volume.
XRP transactions per day have steadily increased in an upward trend since 2014. The network, RippleNet, is composed of; xCurrent, which processes global payments for customers; xRapid, to source on-demand liquidity; and xVia, to plug into RippleNet to send payments.
It was recently announced that xCurrent will be used Chinese ecommerce company LianLian international. Non-bank financial services institution, Cuallix, recently became the first worldwide institution to use xRapid, reducing the cost of sending cross-border payments from the U.S. to Mexico. Moneygram, a remittance service, is also piloting a xRapid program.
At US$0.0067 currently, XRP has the cheapest average transaction cost among other high cap coins (not shown). XRP, Ethereum Classic, and Dogecoin have had a similar fee market over the past few months with Zcash consistently cheaper than all others. For the most part, transaction fees denominated in USD rise and fall in line with the cost of the coin itself.
The network value to estimated on-chain daily transaction (NVT) ratio can be used to assess the network’s relative utility over time, although NVT is difficult to compare between coins which use different transactions types. The XRP NVT ratio has been trending lower since July 2015 suggesting transactional use has increased since that time, reaching a low of 75 in January.
Exchange traded volume is largely led by Korea (KRW) with a >5% premium on Bithumb, an exchange with fee-free trading which inherently inflates reported volume data. XRP has been the most popular market added to Bithumb since being added in May 2017. XRP is not nearly as widely traded in JPY or CNY, largely due to trading pair availability and continues to be added to exchanges around the world, most recently Zebpay in India.
While traders normally use charts from the highest volume exchange, the more broad XRP/Tether (USDT) market has the most available data. These charts show that the explosive gains from late December have been erased.
Indicators like Ichimoku Cloud, Exponential Moving Average (EMA), and chart patterns can be used to determine if the trend remains bullish. Details of the indicators and methods used can be found here.
XRP had been in a bullish triangle consolidation pattern throughout 2017, while holding above the 100EMA on the two-day chart and the 200EMA on the daily chart. After the initial breakout, price found resistance at the yearly R1 pivot and 7.618 fib extension.
A bearish double top pattern has begun to form on high timeframes. However, due to the sharp inverted V structure, an Adam-Eve or Adam-Adam is possible. Horizontal support for the pattern is ~US$0.70. Despite the pattern being bearish, this would suggest a gain well North of US$2.50.
The Ichimoku Cloud metrics on the daily chart are all bearish, with a potential bearish Tenkan bounce at the current price level. However, the distance between the Kijun (mean) and Tenkan suggest that XRP is heavily oversold.
If price cannot break the Tenkan, bearish continuation is strongly indicated. A long, flat Kumo at US$1.73 is a magnet for price so long as price does not make a lower low. Should bullish momentum exist, a push to that zone, near the Kumo twist on February 26th, is likely.
Price has also held above the 200EMA, just as it did during a multi month-long period triangle consolidation pattern. Price will likely continue consolidating between the 50EMA and the 200EMA until either level is broken, with higher volume.
The Ichimoku Cloud on the four hour chart also is decidedly bearish, but price has broken the Cloud for the first time since dropping below the Cloud in January. This is the earliest indication of a trend reversal. A long entry signal would follow a bullish Kumo breakout and bullish Kumo twist, and/or a bullish 50/200EMA cross.
Lastly, the trading in the bitcoin (BTC) market indicates that XRP has bounced off a key horizontal level and broken the 50EMA after completing a bullish reversal chart pattern, the falling wedge. XRP fell from this level after forming a bearish descending triangle in May. The measured move and 1.618 fib extension yield a projected target zone of 20,000-25,000 Satoshis.
XRP is a controversial cryptocurrency for several reasons. First, the supply and consensus mechanism suggests that XRP is neither distributed nor decentralized. While nothing is inherently wrong with this, it can be misleading to newcomers who do not understand the differences and nuances between blockchain projects.
Second, major news outlets have reported banks having no interest in actually using XRP, yet RippleNet continues to announce partnerships with multiple banks and companies around the world, seemingly fulfilling their mission to bring broader adoption of the XRP network across the globe – beyond just speculation.
Technicals suggest a continued bull trend, after a return to the mean from being heavily overbought. A USD value of $2.50 and a BTC value of 20k sats is likely within the next few weeks, should the trend continue with its current momentum.
Circle is weathering crypto-winter like every other crypto company, says CEO; refutes valuation rumours
Jeremy Allaire, the CEO of Circle, spoke to Fortune Studios about the company’s activities, and plans for the future, while also discussing how the company weathered the crypto bear market over the years.
Allaire explained that all companies in the crypto business were undergoing the same issue as Circle, and that “business was down,” for all. He continued,“When there’s no volatility or prices are down, then volumes are down… We had very significant growth year last year, even though there was a crypto bear market.”
Despite the bear market however, Allaire revealed that the company’s user base and revenues had increased over the previous year. According to Fortune, Circle was valued at $3 billion, after it acquired the cryptocurrency exchange, Poloniex.
There were rumors of Circle’s valuation falling below $1 million after its lead investor, Bitmain, faced issues of its own, following the fall in crypto prices. Additionally, Circle’s shares were allegedly selling at a steep discount due to the collapse in prices.
Allaire however, refuted the rumors, stating,“I can’t comment on specific transactions or specific prices or things like that, but the way that was characterized was inaccurate. There are secondary platforms, people list the things they are offering… but that doesn’t mean they’re actually trading and the way that was characterized was inaccurate”
Circle closed its acquisition of SeedInvest, an equity crowdfunding site, earlier this month. The acquisition will allow Circle to get into the regulated sphere of issuing securities, which would become a major part of Circle’s business in the near future.
He added,“We’re going to look at ways that we can bring the benefits of digital assets, crypto technologies, and blockchains into this whole area of issuing securities over the internet.”
Allaire also spoke about Facebook’s stablecoin, adding that he looked forward to the competition, and that internet companies issuing cryptocurrencies was a good sign for crypto in the long term
Galaxy Capital-Backed Caspian to Offer Crypto Derivatives Trading
Galaxy Capital-backed institutional trading and portfolio management platform Caspian is launching trading in cryptocurrency derivatives.
Caspian announced Wednesday that it has integrated its platform with the Deribit exchange to offer futures and options (F&O) trading in crypto assets.
Deribit offers futures and options trading for bitcoin (BTC) and ether (ETH), and also provides another perpetual swap product for bitcoin. The exchange does not charge for deposits and withdrawals and “up to 100x leverage”, Caspian said.
Robert Dykes, Caspian CEO, said:
“Our goal at Caspian is to provide crypto traders and investors the same standard of tools and service that exist in the traditional markets.”
The Caspian platform is connected to Deribit through an application programming interface (API) that supports “high volumes with ultra-low latency,” and provides traders with access to Deribit’s full options order book, Caspian said..
Caspian is a joint project between Hong Kong-based cryptocurrency investment firm Kenetic Capital and the U.S.-based based trading systems firm Tora.
The project raised $16 million in funding via a token presale last September, with backing from Kenetic Capital, Galaxy Capital, Octagon Strategy, Global Advisors and others.
Kenetic Capital managing director David Wills called Caspian “a frictionless on-ramp for crypto traders” at the time.
Back in 2017, the Chicago Board Options Exchange (CBOE) and CME Group both famously launched futures products.
Financial markets technology platform LevelTradingField launched a cryptocurrency derivatives exchange last August using the ethereum blockchain. And, in December, cryptocurrency exchange OKEx launched a bitcoin derivative product with no expiry date, meaning that positions can be held indefinitely.
CoinMarketCap Crypto Indices Launch on Nasdaq, Bloomberg, Reuters
Two cryptocurrency benchmark indices from data provider CoinMarketCap will launch today on financial data feeds from Nasdaq Global Index Data Service (GIDS), Bloomberg Terminal, Thomson Reuters Eikon (Refinitiv) and Germany’s Börse Stuttgart, as well as on its own platform.
CoinMarketCap announced the news Wednesday, saying that the benchmark indices will be the “most comprehensive” crypto data offerings for the markets, covering the top 200 cryptocurrencies by market capitalization, one including bitcoin (BTC) and the other without.
The first index is named CMC Crypto 200 Index (CMC200), which includes bitcoin, and covers more than 90 percent of the global cryptocurrency market, the firm said.
The second, CMC Crypto 200 ex BTC Index (CMC200EX), tracks the market’s performance without the influence of bitcoin. The world’s largest cryptocurrency, bitcoin currently has just over 50 percent dominance of the total market capitalization.
“These indices will promote greater accessibility to cryptocurrency data in an easier-to-digest format,” said CoinMarketCap CEO Brandon Chez.
CoinMarketCap has partnered with Germany-based provider of financial indices Solactive for the effort, which will calculate and administer both the indices, as well as rebalance them on a quarterly basis, according to the announcement. Price data is being provided by CoinMarketCap.
Solactive’s head of sales Fabian Colin said that CoinMarketCap data would also give his firm the opportunity to develop custom indices for clients, adding:
“We are looking forward to developing more crypto indices in the future, which will optimistically result in investable indices and might lead to further products.”
Earlier this week, CoinMarketCap also added crypto asset letter grades to its platform from blockchain analytics startup Flipside. The Fundamental Crypto Asset Score (FCAS) metric developed by Flipside evaluates factors such as developer activity and a broad set of transaction data.