XRP Faces Stiff Competition and Fewer Adoption Issues

ripple xrp wallet

XRP (XRP) is the third-largest digital currency by market cap and it is the native currency that runs the Ripple Network. Ripple is a cross-border money transfer firm that is based in San Francisco. The performance of XRP in the digital currency market has been poor for quite some time now.

However, the poor performance of XRP has been linked to a couple of reasons that many XRP enthusiasts probably do not know about, according to OKEx – a top digital currency trading platform. According to the exchange, there are two major issues affecting the performance of XRP. The first issue is that the digital currency is mainly used as a source of liquidity to carry out cross-border payments. The second reason is the strong competition the digital currency faces in the market.

XRP (XRP) Price Today – XRP / USD

#NamePrice24H %
3
ripple
XRP(XRP)
$0.270
-7.02%

Cryptocurrency News Today: Ripple’s Adoption Is Not the Same as XRP’s Adoption

This is one of the major hindrances of XRP performance over the past months that many digital asset investors probably do not know about. As pointed out by OKEx, XRP is mainly used as a source of liquidity to carry out cross-border transactions. The problem with using XRP only as a source of liquidity is that it reduces the potential use cases of the digital currency since it is not used as an exchange medium like Bitcoin (BTC). A snippet of the analysis of the trading platform states:

“Although more than 100 banks and financial institutions have been using Ripple’s RPCA and RippleNet to move fund across the globe, however, the majority of them did not use XRP as a medium. That means institutional adoption of XRP remains relatively low and that will not help XRP in terms of having positive price actions.”

This means that all the announcements about Ripple’s adoption do not really imply that XRP is also adopted. Ripple has several cross-border payments, and most of them do not use XRP. The well-known product of Ripple that uses XRP is xRapid. Therefore, whenever xRapid is adopted, it directly means XRP is adopted. However, not the same can be said when xCurrent or xVia is adopted.

Cryptocurrency Market Update: XRP Faces Stiff Competition in the Remittance Settlement Space

Another major challenge XRP is facing is huge competition in the use niche. Ripple is one of the top international settlement platforms in the world with over 100 banks and financial institutions. However, XRP is not really affected by all these due to the fact that it is encountering a strong rivalry in the industry as more firms are now coming into the international settlement space. For instance, JP Morgan recently launched the JPM Coin as a strong rivalry with XRP.

The digital currency of Facebook – Libra Coin – is another competition that XRP has to face. There are also other traditional payment firms such as SWIFT. The latest announcement of FedNow by the Federal Reserve is another strong rival that could give Ripple a tough time.

XRP has a total supply of 100 billion tokens. According to OKEx, the huge supply of XRP is one of the major factors why its price is not increasing. Out of the 100 billion tokens, Ripple controls more than 50 percent, which are locked up in escrow. If the firm can cut down the total supply (by burning them), the price of XRP might recover.

Princess Ogono is a writer, lawyer and fitness enthusiast. She believes cryptocurrencies are the future. When she's not writing, she spends time with her adorable cat, Ginger and works out often.

LEAVE A REPLY

Please enter your comment!
Please enter your name here

This site uses Akismet to reduce spam. Learn how your comment data is processed.