Ripple Watches as Former Partner Switches Allegiances

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It’s been greater than three months since I final wrote about Ripple (CCC:XRP-USD) in July. On the time, I questioned how lengthy it could take the cryptocurrency to hit $3.50, a worth prediction made by FXStreet primarily based on the belief it held a key assist degree. 

Supply: Shutterstock

Properly, there was one thing to the prediction. Since my article, the value of XRP-USD has appreciated by 93% and trades for greater than $1. So momentum is certainly on the coin’s aspect heading into 2022. 

Nonetheless, the Oct. 6 announcement by MoneyGram Worldwide (NASDAQ:MGI) that it’s partnering with the Stellar Growth Basis, the folks behind Stellar Lumens (CCC:XLM-USD) and the Stellar blockchain community, in addition to Circle, the group behind the USD Coin (CCC:USDC-USD), suggests traders should be not less than a bit of involved concerning the swap of allegiances. 

Right here’s why.

Ripple Has Come a Lengthy Method

In 2021, based on Coindesk.com, XRP-USD is up 392% by Oct. 19. By comparability, Bitcoin (CCC:BTC-USD) has appreciated by simply 119%. After all, I say simply in jest. I’m certain long-time holders of the coin are very proud of their returns year-to-date. 

As for XLM-USD, it’s up 192% in 2021, however it doesn’t fairly match Ripple’s 12 months with lower than three months to go. However, there’s no query Ripple’s come a great distance.

Value predictions are a mug’s recreation at the most effective of occasions, particularly when coping with cryptocurrencies. They’re extremely unstable monetary devices. Anybody who says they will predict the near-term path of Ripple or Stellar Lumens or any of the others has an inflated opinion of themselves. 

However, as is the norm on this enterprise, readers like to examine worth predictions. However, sadly, they are often automotive wrecks. My July article is a wonderful instance of how one can get issues incorrect. 

“In case you’re a speculative investor, I’d argue that Ripple’s odds of falling by one other 36% are significantly increased than its odds of rising 75% to $1. I’d maintain off on shopping for XRP for a couple of weeks till it and different cryptos regain their footing,” I concluded in my July 21 article.  

“As for attending to $3.50, I don’t assume that’s within the playing cards for Ripple in 2021.”

Properly, not less than I used to be one for 2 on the prediction entrance. 

As we head into 2022, I’m wondering if the MoneyGram announcement foreshadows unhealthy occasions forward for holders of XRP-USD, or am I making a mountain out of a molehill?

It’s a Little of Each

The collaboration between MoneyGram, Stellar and Circle will allow fast and cheap cross-border remittance between U.S. dollars and USDC-USD stablecoins to tens of millions worldwide. That’s a victory for all concerned. 

Ripple was MoneyGram’s companion for processing cross-border funds utilizing digital belongings from 2019 till March 2021. It even purchased a 30% curiosity in MGI as a part of its partnership. Nonetheless, as soon as Ripple obtained embroiled in its battle with the SEC over promoting unregistered securities, the association possible grew to become too difficult to keep up.

Bloomberg reported on MoneyGram’s new partnership:

“The deal will give Stellar pockets holders entry to bodily areas to transform USD Cash to money and vice versa, Stellar Growth’s Chief Govt Officer Denelle Dixon mentioned in an interview. Which means it successfully brings the blockchain into the non-digital world. “That is enormous for the Stellar community, and the wallets which might be a part of the Stellar community,” Bloomberg reported Dixon acknowledged in her interview with the writer.

As was the case with Ripple, there’s hypothesis that Stellar Growth could possibly be interested by taking on MoneyGram, which has a present market capitalization of $642 million.

The Backside Line for Ripple

The absence of Ripple’s partnership with MoneyGram has lengthy since been forgotten. As an alternative, the extra important difficulty is the continuing battle with the SEC. Till that’s resolved and solid apart, there’s no assure that XRP-USD received’t get a kick within the posterior by the securities regulator. 

It appears one factor which may preserve XLM-USD out of the regulatory penalty field is the non-profit nature of the Stellar Growth Basis, whereas Ripple Labs is a for-profit group. 

It would end up that the swap is nothing greater than a enterprise resolution by MoneyGram. After all, that received’t save Ripple ought to it lose its case with the SEC, however not less than it shouldn’t put an added burden on XRP-USD sooner or later. 

On the date of publication, Will Ashworth didn’t have (both straight or not directly) any positions within the securities talked about on this article. The opinions expressed on this article are these of the author, topic to the InvestorPlace.com Publishing Guidelines.

Will Ashworth has written about investments full-time since 2008. Publications the place he’s appeared embody InvestorPlace, The Motley Idiot Canada, Investopedia, Kiplinger, and several other others in each the U.S. and Canada. He significantly enjoys creating mannequin portfolios that stand the check of time. He lives in Halifax, Nova Scotia. 

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