Ripple Is Soaring Today -- What Could Be Driving It Higher?
It's been a volatile, but generally positive Friday for cryptocurrencies. Most major cryptocurrencies, including bitcoin (BTC-USD), are up for the day, and Ripple (XRP-USD) is soaring -- up by nearly 21% as of this writing. Here's the latest cryptocurrency price action, and what could be driving Ripple higher.
Today's cryptocurrency prices
Here's a look at the 10 largest cryptocurrencies by market capitalization, and how much each has changed over the past 24 hours, as well as over the past week. Despite the stock market's rapid plunge into correction territory over the past week, most cryptocurrencies have actually held their value quite well.
Not only are most cryptocurrencies up for the day, but many are now positive for the week, despite a big drop early in the week in the midst of the stock market's volatile decline. The only cryptocurrency in the red today was Bitcoin Cash (BCH-USD), which is coming off a massive gain yesterday -- in fact, of the top five, it still has the best weekly performance.
Ripple is making up some lost ground
There was no major news that directly propelled Ripple higher -- aside from a few comments by Ripple's CEO, which we'll get to in a bit.
Cryptocurrencies have not done well so far in 2018 overall, and Ripple (XRP-USD) has been among the worst performers of the major ones. After skyrocketing by 32,000% in 2017, it started the year with a 60% plunge in January (for comparison, bitcoin fell by 25%). So, a lot of this price action could be a strong rebound following a worse-than-average drop.
Ripple's CEO explains why it's better than bitcoin
Ripple (XRP-USD) CEO Brad Garlinghouse recently said that he doesn't consider Ripple (or any of the others for that matter) to be a "cryptocurrency." He said this because you can't simply walk into any business you want and pay with bitcoin, Ethereum, or other cryptocurrencies.
However, Ripple is different because it solves a problem. "I don't think it's (bitcoin) going to solve a payments problem. XRP is 1,000 times faster and 1,000 times cheaper than a bitcoin transaction," Garlinghouse said. [NOTE: Garlinghouse owns bitcoins and has a positive outlook for them.] If you aren't familiar, Ripple sells payment-transfer solutions to financial institutions, and the XRP is the technical name for the payment token used with one. Essentially, money that needs to be sent internationally is converted into XRP, sent to its destination, and immediately converted back into the local currency.
Garlinghouse also pointed out that since the company owns 61% of the XRP tokens in existence, the company has a big motivation to see the Ripple ecosystem succeed, and that it's focused on the long haul. Perhaps investors who agree with this logic are helping drive the digital currency higher.
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Matt Frankel owns Ethereum tokens. The Motley Fool has no position in any cryptocurrencies mentioned. The Motley Fool has a disclosure policy.