Ripple does it again, making waves in the headlines of crypto-enthusiasts everywhere. Not only has it now reached a market cap of over $120 billion, but for the first time ever it has surpassed the $3 mark. Currently, Ripple has a market cap of $122.7 billion and is going for $3.17, giving it a +31.84% change in the past 24 hours, according to CoinMarketCap.
That’s pretty astounding, given that the cryptocurrency was going for about $0.25 back in December. Their market cap is only second to Bitcoin’s, which is currently $254.6 billion. Bitcoin’s dominance over the crypto market cap (now at $732.7 billion) has reached the lowest it’s ever been, at only 34.7%.
What’s causing the coin to take off now? Some believe it has to do with the fact that the transaction fees are significantly less than that of, say, Bitcoin. Ripple also has a processing rate of four seconds, which is faster than any other cryptocurrency at the moment. With many people turning away from Bitcoin as it stutters, they have discovered (and evidently latched onto) Ripple and its capabilities. The main difference of Ripple is that it is fully controlled by one company that wants the coin to be the cross-border payments solution for large financial institutions based on blockchain technology. Already, they has done trial runs with big-time financial institutions, such as American Express (NYSE:AXP) and Santander (NYSE:SAN) and has been helped along in its road to making headlines by SBI Holdings (OTC:SBHGF) and SBI Ripple Asia, which had created a consortium with Japanese credit card companies to utilize blockchain.
How far will Ripple be able to go? Things all seem bright and shiny right now, but they may not be able to last, due to the way Ripple is set up. I’ve already mentioned that the company Ripple has complete control over the cryptocurrency and its tokens, XRP. The company initially created 100 billion XRP, 38 billion of which are currently in circulation. The executives at Ripple can release as many as 1 billion coins per month, which could oversaturate the market, according to Stephen Powaga, the head of research at the investment firm Blockchain Momentum. That will cause the classic supply and demand scenario: with an over-supply of the digital currency on the market, the price will likely begin to decrease. The company, therefore, needs to be careful not to cause this, if it wants to keep the momentum going.