Ripple prices were upbeat on Monday morning, having jumped more than 20% in the previous 24 hours, but optimism still remains well below normal.
Cryptocurrency markets have been locked in a downward spiral for weeks on end. Heightened regulatory pressure from the U.S. Securities and Exchange Commission (SEC) is the main culprit, given that the agency is investigating dozens of blockchain startups and their affiliated tokens.
Some reports even say that the SEC is going to designate digital assets as “securities.” This action would be pretty bad for cryptos, but it’s probably not as bad as investors think, as I wrote in yesterday’s Ethereum price forecast.
In any case, Ripple prices bucked those trends on Monday. The XRP to USD exchange rate was up by 20.02% at the time of this writing. What’s going on?
Well, there are two main drivers in today’s Ripple news update.
- G20 leaders say cryptos don’t threaten financial stability. This is by far the most important reason for surging XRP prices. Mark Carney, governor of the Bank of England and director of the Financial Stability Board (FSB)—an international meeting group for central bankers—released a letter on Sunday saying that “crypto-assets do not pose risks to global financial stability at this time.” Markets went ballistic after as a result. Carney is the de facto leader of central bankers, a spokesman for the G20’s financial elite. He was speaking on their behalf to the rest of the G20 audience, meaning that regulatory efforts might begin to calm down in the following weeks. (Source: “To G20 Finance Ministers and Central Bank Governors,” Financial Stability Board, March 13, 2018.)
- David Schwartz shoots down XRP criticisms. For those who are unfamiliar with David Schwartz, he is Ripple’s chief cryptographer and occasional spokesman. Once in awhile, he pops up from behind his coding screens to address some of XRP’s strongest critics. This was no exception. Schwartz took to Quora to answer a question about instant XRP transactions. You should read his answer in full. Needless to say, it was the kind of education that is crucial to XRP’s long-term success. (Source: “If XRP/RIPPLE needs to be cashed out by a bank after a cross-border transaction, then how does instant XRP transaction help if it can take up to a week to turn back into USD through your bank?,” Quora, March 16, 2018.)
I’m skeptical of Monday’s rally.
I need to see sustained strength in XRP trading volumes and price momentum before I buy into the recovery. But don’t mistake that for long-term bearishness. Nothing could be further from the truth.
I remain firmly in the camp that sees XRP prices exploding this year. As such, we are leaving our $10.00 Ripple price prediction unchanged for 2018.
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