Echler Solomon Feng
Dec 17, 2018

The Ripple Effect

When Bitcoin sneezes, all other cryptocurrencies catch a cold. So, when Bitcoin took a deep plunge this year, the whole crypto market followed suit. The contagion affected all the promising blockchain projects as most ICO’s are pegged to the Bitcoin (and its sisters like Ether and EOS) for crowdfunding.

Among the more resilient coins showing signs of breaking away from Bitcoin is Ripple (XRP), with trading prices that are fairly stable over this year. Thanks to major partnerships in its pipeline, Ripple is looking forward to institutional adoption. As Reuters reported, Ripple is ironing out details of an agreement that will assist the UAE Exchange on cross-border payments in Asia as early as the 1st quarter of 2019. Ripple already has an impressive list of partnerships that include Google and Apple, yet no details or dates about these arrangements have been made public. As they say, it’s all in the rumor mill.

The choice of Ripple is beginning to gain traction because of signs of its stability. Although its current price has fallen by 90% from its all-time high – it has been steady in the last three months. This, compared to Bitcoin and Ether which have lost as much as 50% of their value in the last 90 days. It's true that it's too early to say, but fundamentals like institutional adoption and partnerships are going to cement its stability even further. Moreover, it is also fundamentals like these that we will see Ripple slowly decouple itself from Bitcoin and other crypto assets – into a truly stable coin, and a class of its own.

The deal with the UAE Exchange is the kind of reinvigorating news that we need to fortify the thinking that cryptocurrencies can be of practical use. The UAE Exchange is one of the oldest and largest money transfer houses in the Middle East. It was commended by market observers that its partnership with Ripple is a forward thinking and progressive approach. If executed properly, UAE can tap into a market that has sent over US$620Billion as cross-border remittances to Asia alone. Imagine if UAE captures just 10% of that – with lower transaction fees and speedy delivery as intrinsic attractions of the XRP.

If Ripple can show adoption by money transfer such as that with the UAE Exchange, imagine if banks and other financial institutions get into the game. It is good for Ripple, and definitely good for investors who are relying on fundamental developments about what the future this digital coin can bring.

This is the kind of corporate maneuvering we would like to see with other cryptocurrencies. With strong leadership at the helm, one who can steer the company away from current market challenges and lead a path to a stable, durable future – for the company and the shareholders. It is indeed commendable that all current efforts are made to delink themselves from the problem – which is Bitcoin and ether.

We can all learn from the Ripple effect. There are a lot of small-cap companies that have the massive potential to disrupt current business models. But first, they have to improve their fundamentals. This in time will unhinge themselves from the weight that Bitcoin and ether brings.