Ripple (XRP) had experienced substantial sideways movement last month; XRP price has been on the downward trend after trading around $1.20 in mid of the last month. The decline in Ripple price looks quite strange considering the increasing confidence on RippleNet from banks and payment services companies.
Its price continues to trade in the narrow range of $0.90 to $0.95 over the last week – while analysts are presenting a bearish outlook for XRP price.
RippleNet Popularity Doesn’t Improve Traders Confidence
Ripple’s blockchain technology (Ripple Net) has been experiencing huge appreciation from the financial sector, with its potential to reduce transaction time and costs, especially in comparison to Bitcoin (BTC) and Ethereum (ETH).
Though its xCurrent and xRapid products have attracted prominent payment services companies and banks, traders are criticizing ripple for its centralized nature relative to the decentralized nature of Bitcoin and others.
The Distribution of new Coins Could Impact Demand
Market pundits have less confidence in XRP because it’s widely believed that its founder holds the majority of the ripple coins – meaning any price growth will only increase the wealth of the founder.
The ripple team has recently announced it will release 1 billion coins every month for the next 55 months in order to avert trader’s concerns regarding the founder. This means that ripple is looking to distribute 55 billion coins to investors; but this strategy has also been negatively impacting the price. This higher inflow XRP coins could outpace demand – thus negatively affecting XRP price in crypto exchanges.
Banks Are Developing Blockchain Technology
Its x-Current product has attracted more than 100 banks – this will help the XRP team to accumulate more revenue. Six major banks — Credit Suisse, Barclays Canadian Imperial Bank of Commerce, Mitsubishi UFJ Financial Group, HSBC and State Street, have recently announced a partnership to produce their own “utility settlement coin” that will be backed by its own corresponding blockchain. The blockchain project from six banks is expected to complete by late in 2018.
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