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One of the world’s leading cryptocurrency exchanges may list Ripple’s XRP on its trading platform. While the rumor stands unconfirmed, its impact is already visible on the XRP’s market cap, which has come close to surpassing that of Ethereum.
The token on Tuesday surged as much as 26 percent from its November 4 low at $0.449, forming intraday peak towards $0.569 on the BitFinex exchange. The rally saw aggressive buying action with traders entering long positions on higher high formations. A downside correction ensued during the early European trading session. XRP dropped down and now seems to have located moderately strong support at $0.528.
Initial theories suggested that Ripple’s expansion into the Middle East caused the XRP rally. But the signals of Coinbase, a US-based crypto exchange, adding XRP to its platform started eclipsing the earlier hypotheses. The news is almost a couple of months old already, and the rumor itself is nearly two years old.
In September, Coinbase had announced that it would add new crypto assets to its exchange. The San Francisco company explicitly stated that its priority would be more towards those digital assets that are compliant with local law.
The announcement led XRP followers to believe that their token was going to be listed on the famous American exchange. At the time of the news, XRP had surged 9% in a day. However, Coinbase is yet to publish the names of the digital assets it would integrate by the end of this year.
In the meantime, the name Ripple got mentioned alongside the White House. There is a rumor that the Trump administration may pit a much more controlled XRP against a decentralized digital currency phenomenon like Bitcoin. It has led speculators to believe that getting listed on Coinbase could be a walk in the park for XRP.
Ripple CEO Brad Garlinghouse earlier clarified that holding XRP tokens does not provide holders rights to company’s dividends of ownership. In a broader sense, XRP is a utility token currently powering the cross-border payment aspects on the Ripple blockchain. The more demand there is for the token, the higher its price would go – the rules are clear.
“XRP is completely separated from Ripple,” Garlinghouse explained.
However, traders think otherwise. They tend to hold XRP and speculate on their price action based on the fundamental signals from Ripple. New partnerships, for instance, boosts XRP price every time even though the companies involved in the deal may not use the digital coin in reality.
From a legal point of view, a lack of asset class denotation alone could hamper XRP’s chance to get listed on a regulated US exchange. For instance, if the SEC ends up classifying XRP as a security token, then it would discourage exchanges like Coinbase to deal with it due to drastically stricter regulations. Nevertheless, XRP could get listed on equity exchanges under the same denotation.
But, as of now, XRP is functioning as a utility token and appears to be falsely tied with the progress of its parent company Ripple – barring xRapid, which does use the token to settle international transactions.
In the meantime, it is better to hear from Coinbase what it truly thinks about adding XRP as a tradeable asset on its platform. Until then, the rallies appear meaningless in the longer term. At the time of writing XRP’s market cap in third spot is $21.5 billion and Ethereum’s, just above it, is $22.8 billion.
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