Bitcoin and ethereum have understandably stolen the limelight in the cryptocurrency space. Bitcoin has for a long time been the poster child for the digital currency market, while this year ethereum firmly established itself as the second most prominent cryptocoin out there.
But over the past few months another coin has been quietly gaining momentum, solidifying its position as the third biggest cryptocurrency by market capitalisation.
After plunging to $0.03 on April 13 the Ripple price surged more than 1000% to reach an all-time high of $0.33 just a month later. The cryptocurrency has since then lost some ground, which coincides with a decline in the broader crypto market. Ripple is currently trading at around $0.186, which still represents an increase of more than 500% over the past three months.
Analysts see a couple of reasons for Ripple’s recent rise. In an interview with Coindesk on May 16 Marouane Garcon, founder of private blockchain investment firm Loch Loyal, said that the fear of missing out is the driving force behind the rally. Garcon stated that there is "definitely a snowball effect," adding that it is difficult to blame investors for being interested when Ripple is producing impressive gains.
It’s worth noting that the price of his particular token is much lower than the prices of its bigger rivals. With bitcoin hovering around $2300 per token and ethereum near $200, many potential investors may feel they’ve already missed out on those cryptocurrencies. In comparison, the Ripple token is looking much more affordable to individual investors.
Another important factor is that Ripple’s distributed ledger network has the backing of major banks. In its May 16 article Coindesk quoted Petar Zivkovski, COO of leveraged cryptocurrency trading platform Whaleclub, as saying: "Big money is betting that Ripple will power bank-to-bank and bank-to-consumer international money transfers in the future. Remittance is a [$500bn per year] market and Ripple has made great headway into it by partnering with major banks".
Earlier this week the Bank of England announced that it had successfully carried out a test of Ripple’s interledger technology to simulate a real-time payment between two central banks’ systems.