Ripple set out to challenge the notion that traditional banks and cryptocurrencies could not collaborate effectively. Unlike Bitcoin, which aims to function as a regular currency for daily transactions, Ripple operates as a real-time payment settlement and remittance system designed for banks and payment networks. Its goal is to improve upon traditional financial systems like SWIFT by enabling institutions to conduct near-instant, secure, low-cost international transactions.
Rather than focusing solely on transferring its native digital asset, Ripple's network allows financial institutions to move traditional assets such as gold and fiat currencies. These transfers are facilitated using Ripple’s native cryptocurrency, XRP.
However, Ripple has faced criticism from some industry observers who argue that it is not a true cryptocurrency or a decentralized network. Critics often point to the absence of miners and the restricted access to its blockchain. Ripple has countered these claims, stating that its network is on a path toward greater decentralization and that the protocol can operate independently even if the company ceases to exist.
XRP Market Performance in 2018
XRP demonstrated remarkable price stability from its launch in 2013 through early 2017, trading at approximately $0.005. This pattern changed dramatically in 2017 when XRP’s value surged to $2.30 by year-end—an increase of 38,000%.
The bullish trend continued into the first week of 2018, with XRP reaching an all-time high of $3.36, representing a 46% gain over the previous week. However, a market correction on January 8 led to a 27% decline, pulling the price down to $2.46.
By January 17, XRP had dropped to $1.18, and by February 1, it was trading below $1. The rest of the year was largely bearish, with XRP maintaining a downward trajectory despite minor recoveries in February and April-May. By the end of December, XRP was trading at $0.36, an 84% decrease from its value at the beginning of the year.
When compared to Bitcoin, XRP outperformed BTC in early January with a 25% relative gain. However, it failed to sustain this advantage, and the XRP/BTC pair lost 44% of its value over the course of the year.
Major Developments for Ripple in 2018
2018 was a significant year for Ripple in terms of partnerships and expansion. Early in the year, the company announced that three of the top five global money transfer firms would begin using Ripple’s technology. Soon after, Ripple partnered with MoneyGram to pilot international payments using XRP.
Other notable partnerships included collaborations with Santander, which launched a Ripple-powered international money transfer app in several European countries, and agreements with financial institutions like PNC, InstaReM, and Siam Commercial Bank. These developments signaled growing trust in Ripple’s technology among traditional financial players.
In May, Ripple faced a lawsuit from an investor who alleged that XRP violated federal security laws. The case drew attention to ongoing regulatory uncertainties surrounding digital assets.
On the innovation front, Ripple introduced Xpring, a venture fund focused on supporting startups building on the Ripple protocol and XRP. The company also launched a $50 million academic research initiative, with the University of Texas at Austin among the first recipients.
Celebrity engagements also made headlines, with performances by Snoop Dogg and a keynote address from former U.S. President Bill Clinton at Ripple’s Swell conference. These efforts aimed to increase mainstream visibility and credibility.
Throughout the year, trading platforms such as Revolut, eToro, and Uphold began offering XRP, though it was not listed on Coinbase in 2018.
Outlook for 2019
Despite a challenging year for XRP in terms of price performance, Ripple as a company made substantial progress in forming institutional partnerships. While market sentiment around cryptocurrencies remained cautious, growing adoption of Ripple’s technology could eventually positively influence the value of XRP.
The company continued to face scrutiny over its ownership of a large percentage of the XRP supply, which some investors viewed as a centralization risk. Even with lock-up agreements in place, restoring full market confidence remained an ongoing effort.
Although a return to the $3 price level seemed unlikely under prevailing market conditions, XRP was expected to maintain relative stability depending on broader investor sentiment toward digital assets. 👉 Explore more market strategies
Frequently Asked Questions
What is the main purpose of Ripple?
Ripple is designed as a real-time settlement system for banks and financial institutions. It aims to facilitate fast, low-cost international transactions and improve upon existing systems like SWIFT using blockchain technology.
How does XRP function within the Ripple network?
XRP serves as a bridge currency in the Ripple network, enabling the transfer of value between different fiat currencies. It helps reduce liquidity costs and settlement times for cross-border transactions.
Why did XRP’s price decline in 2018 after a strong 2017?
Like many cryptocurrencies, XRP experienced a market correction after the rapid price increase in late 2017. Regulatory uncertainty, investor caution, and overall bearish market conditions contributed to the decline throughout 2018.
What are some notable banking partners of Ripple?
Ripple partnered with several major financial institutions in 2018, including Santander, MoneyGram, PNC, and Siam Commercial Bank. These partnerships aimed to pilot and implement Ripple’s technology for international payments.
Is XRP considered a security?
This has been a topic of legal and regulatory debate. In 2018, a lawsuit was filed alleging that XRP is a security, but Ripple has consistently denied these claims. The outcome of such legal challenges could significantly impact its regulatory status.
Can the Ripple network operate without the company?
According to Ripple, the protocol is designed to be decentralized and self-sustaining. The company claims that the network would continue to function even if Ripple itself were to dissolve.