Skip to main content

Banco Santander ADR(SAN-N)
NYSE

Today's Change
Real-Time Last Update Last Sale Cboe BZX Real-Time
Volume

Disclaimer · the source of content originated from an external provide and placement with press releases may or may not have been paid-for. Use at your own risk.

Why XRP Was Down 8.33% Today

Motley Fool - Mon Apr 25, 11:00AM CDT

Man looking at tablet with downward trending line graph on it.

Image source: Getty Images

Overnight, equity markets across Asia and Europe slid amidst increasing concerns about COVID lockdowns that are reportedly expanding within the country of China. As the broader markets dropped, so did the overwhelming majority of crypto assets within the fintech space. Over the past 24 hours, XRP was down the most among top cryptos, trading at $0.6482 per coin, marking an 8.33% loss for that timeframe, according to CoinMarketCap at press time.

XRP's lawsuit with the U.S. Securities and Exchange Commission regarding whether or not XRP is actually a securities asset rather than a form of digital currency continues to progress slowly with resolution now expected in early 2023. Until then, most major cryptocurrency exchanges have delisted XRP from their respective trading platforms, except for Binance and Kucoin.

XRP has greater exposure to traditional markets

At the time of writing, all the top-10 crypto assets ranked by their respective market valuations were in the red -- including Bitcoin, Ethereum, and Terra. However, XRP was still down the most. That's most likely due to the fact that XRP has more exposure to the traditional banking market than other crypto projects.

XRP was created by Ripple Labs to facilitate cross-border money transfers for banking institutions for less than a penny per transaction and requiring less than five seconds to settle those transfers. According to the Ripple website, it currently has hundreds of banking institutions as customers across 55 countries, including Bank of America, Santander, American Express, and many others. All of those traditional banking clients are greatly impacted by fluctuations in the financial and securities markets, which indirectly affects XRP's price as well.

Should you buy XRP?

Ripple Labs provides a more efficient, cheaper option to banks than the current global payment system known as the Society for Worldwide Interbank Financial Telecommunications (SWIFT). Specifically, its RippleNet solution is a global network that financial institutions have been using for years to transfer money more quickly and at a lower cost than through SWIFT. Instead of proof-of-work or proof-of-stake methods to approve blockchain transactions, Ripple uses its more centralized -- read as "micromanged" -- XRP Ledger Consensus Protocol, which is more appealing to larger institutional clients from a security and safety perspective.

This is not financial advice and investors should do their own research, investing only what they can afford to lose. However, according to CoinMarketCap, XRP is currently trading at an 83% discount from its all-time high of $3.84 back in Jan. 2018, making it an incredibly cheap buy for a proven asset.

Since XRP already has widespread adoption among hundreds of banks globally, even if the SEC wins its case -- and XRP is deemed a security -- it's unlikely to affect XRP's current institutional use case. Conversely, if XRP wins against the SEC, there's significant upside for this unique crypto project.

Earn a $100 bitcoin bonus

Our updated list of the best cryptocurrency apps for 2022 is packed with best-in-class picks. The cryptocurrency apps that landed on our shortlist include perks such as $0 commissions, and one pick that is offering a $100 bitcoin bonus. Check out the list here and get started on your crypto journey, today.

Get the top picks

Tor Constantino owns Bitcoin, Ethereum, and XRP.

We're firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.American Express is an advertising partner of The Ascent, a Motley Fool company. Bank of America is an advertising partner of The Ascent, a Motley Fool company. The Motley Fool owns and recommends Bitcoin and Ethereum. The Motley Fool has a disclosure policy.