XRP
Perhaps no major cryptocurrency has spurred as much debate as XRP, a digital token controlled by a San Francisco company called Ripple. Several years ago, the firm set out to upend the global cross-border payment industry by replacing the clunky, old system for transferring cash with a Bitcoin-inspired solution.
But the banking industry wasn’t about to let an upstart disrupt a multi-trillion dollar network that’s vital to their corporate clients. So Swift, the Brussels-based cooperative of 11,000 financial institutions that directs the international flow of cash, rolled out its own upgrade in 2017. Shunning blockchain technology, Swift’s system uses traditional software to make cross-border payments easier and faster and thousands of banks have adopted it in a setback to Ripple’s ambitions.
As a result, skeptics say XRP lacks the usefulness of Bitcoin or Ethereum. XRP isn’t used by anyone except Ripple, and even there it hasn’t been adopted as broadly as the company would like. Some luminaries in the crypto world give it a wide berth. Billionaire twins Tyler and Cameron Winklevoss have yet to permit traders to buy and sell XRP on their crypto exchange Gemini. Critics such as Ryan Selkis, the CEO of an influential New York crypto software firm called Messari, have faulted Ripple for not being more transparent on how it manages and sells its own supply of XRP.
But that hasn’t stopped the XRP army, as its supporters are known, from speculating in the third-biggest cryptocurrency. Juiced by XRP’s 355% jump this year, they’ve flooded YouTube with exuberant predictions. “$20 price when this trend finishes!” says the headline on one of many such videos. XRP was trading at 63 cents on Thursday.
Litecoin And The New Breed
The other stalwart popular with investors is Litecoin, a digital currency that was introduced in 2011 as a leaner, more efficient version of Bitcoin. Litecoin can process transactions faster than Bitcoin. Many buyers often pick up Litecoins — they were going for $91 Thursday — in tandem with Bitcoin and Ethereum, and it is one of the six bellwethers that comprise the Bloomberg Galaxy Crypto Index.
Yet a new generation of digital assets moving up the league table are more influenced by Ethereum’s design than Bitcoin’s. Three of the standouts are Chainlink, Cardano, and Polkadot. The latter has been attracting institutional investors because it was created by Gavin Wood, the British technologist who helped develop Ethereum with Vitalik Buterin. Polkadot enables application developers to create their own blockchains. Then, like highways joining cities, it links them with other blockchains in one mammoth network, says KR1's McDonaugh.
He made Polkadot his No. 1 investment, and Dan Morehead, the founder of crypto investing pioneer Pantera Capital in California, believes it has the potential to challenge Ethereum’s position. Polkadot, which is now ranked ninth on CoinMarketCap’s roster of currencies, is up about 85% since it started trading in August.
The longer the crypto rally goes on, the more new investors will look beyond Bitcoin for potential jackpots. That’s what Richard Edge, a 53-year-old British handyman and landscaper, did. After landing a windfall, he used eToro in August to invest 50,000 pounds ($67,220) in crypto. He put half in Bitcoin and the rest in Ethereum, XRP, and a few others.
“There’s a lot of unpredictability about any of this but I’m finding altcoins better performance-wise,” Edge says. “Because there’s a history of bull runs and top investing companies are dipping their feet into the market that gives me confidence.’”
This article was provided by Bloomberg News.