Bitcoin’s influence over the prices of all digital assets may start to wane soon, believes the CEO of Ripple, Brad Garlinghouse. In 2018, altcoins mostly rallied in lockstep with Bitcoin, with rare exceptions. However, the trend may soon turn, as market participants realize the fundamental differences between Bitcoin and other digital assets.
"There's a very high correlation between the price of XRP and the price of bitcoin, but ultimately these are independent open-sourced technologies," Garlinghouse said in an interview for CNBC’s Power Lunch.
"It's early, over time you'll see a more rational market and behaviors that reflect that," Garlinghouse said.
Garlinghouse is a believer in the planned obsolescence of Bitcoin - an asset that ushered in the age of decentralized digital coins, but may not survive in the future.
https://twitter.com/bgarlinghouse/status/1001963456600436736
The price of XRP is formed by a complex interaction of trading against several assets. Bitcoin has a large share of around 30% of all trades, but is almost matched by volumes denominated in Korean Won. Also, XRP has seen a steady inflow of Tethers (USDT), making up more than 20% of volumes. While USDT does not reflect the attitudes of US-based investors, it resembles direct trading against the dollar.
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XRP has seen the greatest appreciation upon mentioning a potential fiat on-ramp through Coinbase. Unfortunately, this avenue is closed for now, and Ripple is relatively difficult to acquire, at least for mainstream US-based investors.
XRP has fallen to $0.61, but bullish predictions see it rise as high as $10 toward the end of the year, provided there is enough demand. In the bear market of 2018, XRP was one of the worst performing assets, still down about 70% from its peak, with no signs of recovery.
The popularity of Ripple is also increasing with more than 20 partnerships signed at the beginning of 2018, pointed out Garlinghouse. Ripple aims to help banks achieve frictionless, cheaper cross-border transactions. However, the usage of actual XRP coins bought on the open market to achieve this is under question.
Garlinghouse believes the public would move beyond speculation, once they understand the different features and use cases of coins.
"It's still a nascent industry, the speculation in the market dominates the trading activity," Garlinghouse said. "I think it's a matter of time until people better understand the different use cases."
The use case of XRP is unique, and the asset does not have the same blockchain as Bitcoin, instead using a series of servers to verify the distributed ledger every few seconds. This allows for fast, free transactions. But in the real world, usage of XRP coins is limited.
This article appeared first on Cryptovest
