The crypto sectors’ eyes were mainly on Bitcoin on Dec. 16, as it smashed records and broke $21,000.
But it was also a very good day for XRP, which jumped 28% in just 24 hours after a very long, very bad week, making up almost all of the steep losses it saw in the wake of the Flare Network’s Spark token airdrop on Dec. 12.
Yet, XRP’s market cap is still down more than $5.5 billion since Nov. 24, when the altcoin’s price peaked at nearly $0.77. It’s a comedown for the token that was, at the time, up 178% in a week—and nearly 300% in 10 days—after a lackluster 2020, even regaining its status as the No. 3 cryptocurrency by market capitalization.
Despite gaining almost 24% in 24 hours—more than double BTC’s growth on the day it broke first $20,000 and then $21,000—at press time the No. 3 cryptocurrency is still down about 2% over the past seven days, with its price holding at around $0.56.
While that is still more than double the $0.25 range it languished in throughout the fall, all of this makes XRP something of an anomaly in the wider crypto market at present. Among the top 20 coins by market cap, it’s the only altcoin that’s down from where it was a week ago, according to CoinMarketCap.
What’s going on?
In a nutshell, it seems that on Dec. 16, XRP regained most of the drop it saw following the Flare Network’s airdrop of Spark tokens on Dec. 12.
Most crypto exchanges supported the airdrop—with the Flare Network taking a snapshot of XRP balances and rewarding account holders with Spark tokens on a one-to-one basis.
XRP addresses swelled in the run up to this event, and it appears many investors sold up after the giveaway concluded. Which suggests that a fair amount of XRP’s gains in the weeks leading up to the airdrop were from buyers looking for a freebie.
But even with bitcoin’s long coattails on an historic day for the first cryptocurrency, it seems that XRP had plenty of support on its own.
It’s worth remembering that XRP isn’t best known for the dramatic price rises seen by the likes of bitcoin and ether. Despite being a mainstay in the rankings of the most valuable altcoins, it’s consistently ranked poorly when it comes to the altcoins that deliver the best returns.
However, it could be argued the Flare Network’s launch will be a significant milestone for the XRP Ledger, as it will deliver smart contract functionality that enables it to compete with Ethereum’s dominance over decentralized apps and DeFi in a meaningful way.
International payments firm Ripple, which is built on XRP, has also gone to great lengths to point out that XRP has far more scalability than Bitcoin and Ethereum combined, given that the XRP Ledger can handle 1,500 transactions per second—and can match the throughput of the Visa network.
XRP Twitter reacts
As you’d expect, the XRP Army has been out in full force—vowing that there’s much more positive price action just around the corner after Bitcoin smashed records. Blockchain Backer, who describes themselves as an XRP enthusiast, amassed hundreds of retweets when they declared:
“With our recent price action on the XRP chart, and the macro view of crypto, including Bitcoin’s break out into all-time high, I don’t believe $2 is XRP’s next resistance level. I think we’re going to go much higher.”
Others point out that, while Bitcoin has matched its all-time high, XRP is a long way from returning to the record levels of $3.84 seen in January 2018. At present, the altcoin would need to rise by more than 600% to return to this level—and as hungry crypto enthusiasts look for their next money-making opportunity, it’s possible that we’ll see more investors jumping in.