There are exciting times to be part of the cryptocurrency community. Bitcoin is setting yearly highs in quick succession, and even XRP managed to briefly surpass $0.3. The big question is: can Ripple’s native asset go higher in value again?
The $0.3 Level Didn’t Hold
In a not entirely surprising turn of events, the value of XRP took a spill rather quickly after hitting $0.3. Over the past few years, the performance of Ripple’s native asset has been anything but stellar. As such, expecting it to keep rising in value after surpassing this psychological barrier is futile. It is unlikely to occur ever again, yet a slow and steady rise in value is certainly within the realm of possibilities.
For the time being, the value of XRP has dropped to just above $0.29 again. It is still an increase by 20.3% in the past 30 days, but there are some questions as to whether this level will be sustained moving forward. Given the current sentiment, that seems unlikely. Anyone hoping to see XRP approach its all-time high again will not be too happy with how things are going right now.
Demand Isn’t Picking up
Contrary to what most people think, the real “demand” for Ripple’s asset won’t be found on exchanges or DEXes. Instead, it lies with institutional players. Those companies and partners are not buying XRP on crypto exchanges and trading platforms. Instead, they buy from Ripple directly through the company’s monthly escrow contracts.
As there is always a surplus of XRP being put back into escrow for a few years, there will be no buybacks from the open market either. Considering how over 45 billion XRP are in circulation outside of escrow contracts, there isn’t much room for the price to move. Speculators may push the value up a bit now and then, but that is as far as things will go.
Lack of Everyday use
While Bitcoin isn’t necessarily designed for mainstream use today, XRP certainly doesn’t fit that bill. To anyone but Ripple’s partners, this asset has very limited appeal and functionality. That doesn’t mean this situation can’t be improved upon in the future, but for now, there simply isn’t much reason to own Ripple‘s asset outside of speculative purposes.
Even those purposes will be limited in terms of what can and will happen in the near future. It seems unlikely that anything will happen to this asset in the near future. Even though XRP notes nearly $5 billion in trading volume, things are not necessarily looking promising in the price department.