Many cryptocurrencies may be susceptible to the criticism that they “don’t do anything”, but Ripple is not one of them. The Ripple network does something for which there is great demand all over the world, and does it very well indeed. This is the art of facilitating cross-border payments cheaply, efficiently, and quickly.

When you send money overseas via a bank, it may take several days to arrive at its destination. If you turn to Bitcoin, you’ll have to wait about ten minutes. Ripple completes the transaction in 3-5 seconds. And you don’t have to do one at a time: The network can handle 1,500 transactions per second, with the possibility, one day, of scaling up to 50,000 transaction per second. What makes this possible is Ripple’s distinctive validation mechanism, which doesn’t rely on mining.

Even those who hardened their hearts against cryptocurrency following the FTX collapse can appreciate the simplicity of using a digital token as a bridging currency between parties living across the globe from each other. And the savings you can make in this way are concrete. Compare sending money by wire transfer at a cost of up to $50 with a Ripple transfer that will set you back only a fraction of a cent.

When Ripple’s XRP token surged by a giant 420% in November 2024, the key driver was anticipation for Ripple Labs’ new stablecoin, RLUSD, which was to be pegged to the US dollar. Traders felt that this product could further solidify the bridge Ripple were building between traditional finance and the blockchain. In other words, the exuberance was not irrational. Join us, especially if you plan to trade Ripple online, as we take a deeper look at what Ripple has to offer.

Ripple ETFs

In October 2024, Bitwise Asset Management were the first to apply for permission to offer an ETF tracking the performance of XRP. Canary Capital Group followed suit shortly afterwards. From the perspective of Ripple CEO, Brad Garlinghouse, the fact that $17 billion moved into Bitcoin ETFs between January and October “clearly demonstrates that there’s demand from institutions and retail to access this asset class.” The high level of demand is heartening for the sector because it proves there is strong institutional interest in it. Institutions opting to trade Ripple ETFs could inject the system with some serious liquidity.

Back in September, when Grayscale Investments said it would offer clients an XRP Trust (a kind of share with limited supply), XRP shot up by almost 10%. Even without the superior tradability of ETFs, traders’ interest in getting a piece of the Ripple pie was strong.

XRP Price Spikes

Ripple is used most actively in Southeast Asia, where traditional payment solutions are inefficient. In the past, XRP prices have spiked when news on the issue broke out in this region. For example, in 2019, when Japan and South Korea started experimenting in cutting down the time and costs of cross-border transfers, XRP rallied. Demand in this part of the world is so high that Ripple bought 40% of payment firm Tranglo in 2021 in order to meet it.

And when XRP enjoyed a very good day on December 2nd, 2024, gaining a cool 32% within 24 hours, the move was motivated by strong buying interest in South Korea. There were, however, many supportive factors in the backdrop. Donald Trump’s win in the US presidential election was great news in crypto circles due to his pledges about establishing a crypto-friendly economic environment. Trump had said he would fire SEC chair Gary Gensler, who had sued Ripple in 2020 for selling XRP tokens without registering them as securities.

New York regulators approved the RLUSD stablecoin later in December, so that XRP shot up 13% on the 18th of the month. There was a high degree of bullishness on the token on the day, with 830 million of them picked up by XRP bulls. Some analysts said prices for the token could go from their new high at $2.69 all the way to $9. It’s worth noting that, while many businesses use Ripple’s international payment system, most of them don’t make use of XRP tokens in doing so. Although this trend could change, it does beg the question of how much institutional demand there’ll be for the token itself, looking ahead.

Wrapping Up

Despite this last caveat, XRP did indeed find itself the center of plenty buying interest in response to the stablecoin approval, which is perhaps a good sign. And, beyond the world of payments (but still connected with it), Ripple is forging a place for itself in the market for smart contracts. Companies can build decentralized applications on the Ripple blockchain that suit their own needs, for instance automated payment systems or recurring transfers.

According the Garlinghouse, “cross-border payments is the technology’s killer use case”, and he aims to make them possible at any time of the day, and any day of the week, even weekends and holidays. This would be another important improvement on the limitations imposed by traditional banking. Still, he is well aware of the competition in this space coming from central bank digital currencies, other blockchain networks, and SWIFT – who have improved their own payment system to keep up with the times.

As to the token’s late rally, it “looks to be excessive given XRP is now a top-three digital asset”, says Edward Chin of Parataxis Capital, “but that doesn’t mean that it can’t continue given the reflexivity in this market.” All eyes will now be on Trump’s progress in making good on his election promises, which included potentially setting up a strategic bitcoin reserve. This itself could go a long way in legitimizing crypto in the views of central banks, financial institutions, and retailer traders.