Ripple’s XRP, the third biggest cryptocurrency, has grown as much as 70% percent on Tuesday after extending a rally that has been ignited by the mass interest in Bitcoin.
XRP’s value has risen almost four times since the pandemic started – making gains alongside Ethereum and Bitcoin, with bitcoin rising by 4% to a near all-time high of $19,241 on Tuesday.
“XRP has been a speculative investment for a long time. There have been many partnerships announced but few practical applications.” Said Michael Anderson, the co-founder of DeFi venture capitalist Framework Ventures.
Thanks to Bitcoin’s rally this year, which has been partially driven by its fame and reputation as an excellent inflation hedge, other cryptocurrencies are also experiencing unprecedented growth. The most popular cryptocurrencies have gained value thanks to the momentum over the last week. Bitcoin, the most popular cryptocurrency, has gained 8%, and Ethereum, the second most popular, has gained 30%, but XRP has led this growth after growing by a staggering 70%.
The investors pouring their money into Bitcoin, Ethereum, Ripple, and other cryptos are looking to capitalize on the central bank rush to digitalize currencies, especially the European Commissions. ECB (European Central Bank) president Christine Lagarde has previously announced that the bank is currently seriously considering a digital euro.
Ripple’s name plays two roles, as a payments exchange and a currency. Ripple designed XRP with the main aim of performing inexpensive, scalable, speedy, and flexible alternative transactions that will make the crypto “extremely useful” for payments.
Ethereum, the second-largest cryptocurrency in terms of market capitalization, rose above $600 this week – a two-year high head thanks to a major update to its network to address scalability and security. This platform’s network upgrade is expected to usher in a new decentralized finance product that will create alternatives to traditional finances that are high in demand. This also explains the large increase in valuation, says Anderson.
As for bitcoin, any rush to reach past $20,000 and profit-taking comes after that. “[It] isn’t a bad thing; it is healthy for the market to push on further.” Said Rich Rosenblum, head of trading at crypto market maker GSR.
“It will clear the way for more investors with long-term outlooks to enter for the first time, and for existing holders to add to their allocations. There is still a lot of capacity among retail and institutional investors. This price action is arguably the first step of a bull market that is ready for new levels of capital not seen in digital assets,” He also said.