Can XRP Attract Institutional Investors?

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Last Updated on 12 December 2020 by CryptoTips.eu

Jeroen Kok

Jeroen is one of the lead copywriters on Cryptotips.eu and discusses all recent events in the crypto market. This includes news updates, but also price analyzes and more. He developed his passion for cryptocurrency during the bull run in 2017. He has learned a lot since then. The combination of cryptocurrency and creative writing is perfect for Jeroen and an excellent way to share his knowledge with a wide audience. Find me on LinkedIn / jeroen@cryptotips.eu
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Given the clear spike that investors noticed in the price chart of XRP (Ripple) over the past few weeks, with an airdrop snapshot today that could create more bullish momentum for the coin (or a possible “sell the news” reaction) and knowing that the management team of Ripple labs is well known in the US, one has to wonder: can Ripple attract institutional investors in 2021?

With Bitcoin already attracting worldwide international investors, with Ethereum known as the DeFi platform and now having its first stock market fund going as well, the cryptosphere should now ask: when it is the time for third biggest crypto, XRP, to shine?

Advertentie.

All time high, Stellar and overseas

Analysts see three main reasons why XRP has not known an explosive rally in 2020 so far (even though today’s airdrop by the Flare network of the Spark tokens could change all that. If anyone needs a reminder of how quickly airdropped tokens can become valuable, allow us to remind you of the DeFi craze of Q3 2020).

First up among those reasons is the fact that ever since reaching it’s all time high of some $3 in 2018, XRP has lost a significant 85% from the top and many investors bought in too late, when the coin was already overbought and both Bitcoin and Ethereum were ready to blow off their top. This means that there are huge selling orders waiting for XRP at the $1 level of investors wanting to recoup some of their 2018 losses. However, most technical analysts agree that as from the moment that price point is passed, a natural track to $3 would easily be found.

Secondly is its agreement with former CFO and current Stellar Lumens CEO JedMcCaleb. That man has access to a whopping 9 billion XRP which he received for his role in founding the Ripple Labs company in the first place. Problem is thus for XRP that whenever the price goes up, McCaleb can decide to sell some more coins. Given that Stellar is also close to becoming a major crypto, this could prove to be a problem in the future.

Third and last reason is the SEC apparently. The lack of regulatory clarity from the US authorities as to whether the Ripple token should be seen as a security or a currency makes it hard for the company to attract American investors.

Because of this, Ripple CEO Brad Garlinghouse has admitted that some 95% of the company’s clients are currently overseas. The threat by the company to move to either Japan or Singapore could of course change all that in 2021 as Wall Street investors need to diversify their crypto holdings and may not want a US firm to leave the country.

An interesting year lies ahead for XRP with 2021 able to make or break it.