The South Korean Ripple Effect
On January 1st, 2017, a single token of Ripple was valued at one-sixth of a United States cent. Twelve months down the line it is now valued at 2.23 USD. And just over the past week, Ripple crossed Ethereum to become the second largest cryptocurrency in the global market. Ripple has also become the first altcoin to cross 100 billion USD in market valuation.
South Korea Behind Surge?
Though the South Korean cryptocurrency market contributes a small percentage of global BTC trades, it has played a crucial role in bringing Ripple’s market capitalization up from $44 billion to $88 billion.
While investors, Bitcoin and Ethereum holders, are taken aback by the sudden rise, market analysts are attributing the surge to a recently signed partnership deal between SBI Ripple Asia and South Korean banks. And has justified the rise in its users with the same.
The banks, however, will not be processing payments until after the first quarter of 2015. This has led to skepticism and speculation over the use and rise of Ripple. But, three South Korean exchanges alone, in the past one week can account for more than half of Ripple’s $4.5billion daily trading volume. However, the South Korean buyers continue to pay a premium for their digital currency.
The surge in Ripple has gotten a lot of people interested in investing and a lot of speculation surrounds the cryptocurrency. This speculation has gotten government policymakers worried. And the South Korean government has issued warnings prohibiting foreigners and underaged investors from entering the market. Which has, for now, got the situation under control.
More rise in Ripple in the days to come?
But the fact that the South Korean banks are yet to process payments has got people feeling very skeptical about the sudden rise in their market value. Many people working for competitors or investors in competing altcoins are calling it a farce and claiming that no bank has officially made any transactions using Ripple.
This, however, is not entirely true. Because the claim that no bank has used the network is only half true. Major Swedish bank SEB settled $180 million on their Blockchain network by sending cross-border payments on behalf of their high profile clients. And in Japan and Thailand, banks are also processing near-instantaneous transactions using the Ripple Blockchain network.
With respect to their most recent deal, the altcoin will see no official transactions with respect to the South Korean bank deal until mid-2018. However, this comes at a time where the company has closed numerous business deals over the past year and seems to be set to take the company to the next level, with more banks adopting the platform. It will be an interesting year for Ripple and mostly a good one if this stellar business development continues.