Cryptocurrencies are getting a major boost this week, and that includes XRP (CCC:XRP), the coin associated with the Ripple blockchain. In fact, after doubling in price over the last few days, XRP hit a two-year high Tuesday. So what do you need to know about the XRP Ripple stock price? And what is behind the major crypto rally?
To start, crypto bulls were turning their attention to XRP on Monday as well. This is because a series of XRP price predictions paint a very bullish picture for the lower-cost digital currency. As we reported yesterday, some estimates call for the XRP Ripple stock price to hit as high as $26 by 2025. That would imply simply massive gains from its current price near 70 cents.
But what is behind the surge in XRP today?
Well, one answer is simply that broad support for cryptocurrencies is boosting all leading crypto picks. The novel coronavirus itself sparked interest, largely thanks to its economic damage and the stimulus measures that followed. Worried about inflation and the devaluation of the U.S. dollar, many crypto bulls have turned to bitcoin (CCC:BTC) and its peers. This is because bitcoin is largely considered a safe-haven asset now, as well as a hedge against inflation.
However, the upcoming inauguration of President-elect Joe Biden also strengthens this case. Therefore, it is fitting that the XRP Ripple stock price hit a two-year high near 70 cents today. Why? Well, President Donald Trump has allowed the presidential transition process to start. For the stock market, this means that all things Biden are working right now. It also means that further stimulus measures are likely on the way, boosting interest in crypto.
Importantly, bitcoin also crossed the $19,000 for the first time in three years today.
The XRP Ripple Stock Price and New Catalysts
However, as XRP hits a two-year high, there are a few other reasons investors should pay attention. The first is that many may simply see XRP as the best way to enter the space. Evaluating the upcoming inauguration, InvestorPlace contributor Tom Taulli said XRP was the “silver” to bitcoin “gold.” Simply put, 70 cents is a lot more accessible than $19,000. If you are bullish on cryptos but cannot afford to commit to the high price of bitcoin, XRP may be tempting.
But there is one more thing to watch. Many experts think that the upcoming airdrop of “spark” tokens to XRP holders is behind the rise in the XRP Ripple stock price. What does this mean?
Well, based on XRP addresses on Dec. 12, 2020, RippleX will be distributing 45 billion spark tokens. This is largely a way to boost interest in XRP as Ripple, the company behind RippleX, plans to launch a smart contract platform. What better way to spark interest than to give tokens away for free? Ahead of the event, there has been a steady uptick in exchange inflows of XRP. Instead of a selloff, however, this could suggest the XRP price is going to keep heading higher.
With a two-year high under its belt, it sure looks like that is the case on Tuesday. Keep a close eye on the crypto space, because it seems things are only looking up.
On the date of publication, Sarah Smith did not have (either directly or indirectly) any positions in the securities mentioned in this article.
Sarah Smith is a Web Content Producer for InvestorPlace.com.