XRP/BTC prediction: Ripple momentum against bitcoin builds in run-up to SEC ruling
The cryptocurrency market's volatility has shown no signs of losing steam, with most cryptocurrencies trading significantly below their lifetime highs.
Similarly, bitcoin (BTC) and ripple (XRP), two of the top 10 cryptocurrencies by market capitalisation, have failed to make significant strides over the past couple of months.
According to crypto data provider CoinMarketCap, BTC was trading at $19,980 on 7 October, down over 71% from its all-time high of $68,789 on 10 November 2021. XRP was trading at $0.491, down 87% from its all-time high of $3.84 on 4 January 2018.
Interestingly, the bitcoin to ripple exchange rate (XRP/BTC) has climbed dramatically over the previous month, rising from 0.00001607 BTC to 0.00002463 BTC, as of 7 October – a more than 54% gain, indicating XRP's growing popularity and demand.
However, both of these top coins remain vulnerable. BTC has been criticised for its lack of utility, besides being a store of value and its high energy consumption. Meanwhile, XRP's position is at a crossroads due to the pending litigation with the US Securities and Exchange Commission (SEC).
How will both these coins fare in the current market climate? Here we look at the XRP to BTC exchange rate, recent news and other variables influencing XRP/BTC forecasts.
What are XRP and BTC, and how do they work?
BTC and XRP are cryptocurrencies with certain similarities. Both can be used to store and transfer money between users without needing a bank.
The similarities stop there, with their genesis and background radically differing. For starters, Bitcoin was created by the pseudonymous Satoshi Nakamoto, who remains unidentified to this day. On the other hand, Ripple emerged as a separate initiative, while Ripple Labs manages the project’s token, XRP.
Ripple is a payment settlement and remittance system aiming to make asset transfers more efficient locally and globally.
On the other hand, bitcoin is a digital currency designed to be used as a form of payment for goods and services. Bitcoin uses a public blockchain record and a proof of work (PoW) consensus mechanism to allow payments for goods and services.
BTC mining makes it possible to validate transactions and add them to the Bitcoin blockchain. Miners are compensated with BTC for successfully verifying transactions in return for their time and the computational power required to validate the ledger. However, mining negatively contributes to the environment.
Ripple operates on a consensus ledger and a network of validators that is far less energy-intensive, sometimes known as validating servers. Ripple chooses the validators, and they are the ones that enable the transaction validation process to take place.
While Bitcoin is an alternative to banks, Ripple works directly with banks to convince them to embrace the XRP protocol and replace cross-border payment options such as SWIFT wire transfers.
Regarding transaction speeds, XRP is one of the quickest on the market. Ripple transactions are quick, and as a result, the cost to all parties is minimal. On the other hand, Bitcoin emphasises anonymity and centralised resistance over speed. It is far slower.
Bitcoin has a limited supply of 21 million coins – over 18 million have already been mined and are in circulation. XRP has a supply of 100 billion – 49 billion XRP coins are already in circulation.
What is your sentiment on XRP/BTC?
XRP/BTC price history
BTC was launched in 2008 and has generated a 14,621% return on investment (ROI), according to CoinMarketCap. Since its inception in 2012, XRP has delivered an ROI of 8,226%.
The first quarter of 2021 was a watershed moment for cryptocurrencies, with most coins setting new lifetime highs amid strong market momentum. The price of bitcoin increased from $30,432 on 27 January to $63,503 on 13 April. XRP rose at an incredible pace, with its price increasing from $0.2371 on 1 January to $1.83 on 14 April – a leap of 671%.
However, both XRP and BTC lost pace in late Q2 amid China's ban on cryptocurrency trading and mining and Elon Musk's declaration that BTC payments for Tesla automobiles were discontinued due to mounting environmental concerns.
BTC fell to $34,770 on 23 May and to $29,807 on 20 July. XRP followed suit, with its price falling by more than 71% from its April-high to $0.5293 on 20 July.
Market sentiment once again turned bullish, and both XRP and BTC moved upward with occasional bouts of selloffs. As a result, BTC increased by nearly 98% from its July low to hit a lifetime high of $68,789 on 10 November. Similarly, XRP rose 136% to $1.25 on 9 November.
Then, contrary to market emotions and rumours that BTC will reach $100k by the end of 2021, BTC experienced strong selloffs, with its price falling to $46,306 by 31 December. XRP closed the year at $0.83.
Cryptocurrencies had a difficult start to 2022, with growing inflation and war between Russia and Ukraine. Furthermore, the situation deteriorated with the LUNA-UST fall in May 2022, and investors panicked and lost the bulk of their stakes.
Consequently, on 18 June, BTC and XRP recorded 52-week lows of $17,708 and $0.2906, respectively.
As of 7 October, BTC was trading at $19,980 and had a market cap of $381bn. XRP was trading at $0.491 and had a market cap of $24bn.
According to CoinCodex statistics, one year ago, the XRP to BTC exchange rate was 0.00002156, which had climbed to 0.00002463, a roughly 15% gain, indicating that XRP was a better performer over this period.
XRP/BTC news and price drivers
Increased traction on Bitcoin Lightning Network
Crypto market intelligence firm Messari reported in its State of Bitcoin Q3 2022 report that the capacity held in public channels on Bitcoin's Lightning Network had hit a new all-time high of 4,618 BTC. Capacity has increased by 96% since last year on rising adoption and new integrations.
To put it simply, the Lightning Network (LN) is a Layer-2 payment channel network constructed on the Bitcoin protocol. The goal is to speed up the network and reduce the time it takes to settle transactions.
Since its introduction in 2015, Lightning has gained traction and is now widely accepted as Bitcoin's preferred scaling option.
The Lightning Network has been in its own siloed bull market over the past year, insulated from the overall market downturn.
— Messari (@MessariCrypto) October 4, 2022
LN's key metrics have steadily grown, despite #bitcoin’s price dropping 57% over the past year. pic.twitter.com/xNdjZ7I52i
Central Bank of Namibia enables bitcoin payments at Vendor’s discretion
In September 2022, the Bank of Namibia (BON), the country's central bank, announced that it has included "virtual assets (VA) and virtual assets service providers (VASP) under its Fintech Innovations Regulatory Framework in a phased approach, through its innovation hub", even though crypto does not have the status of legal currency in the country.
The BON further emphasised that merchants "willing to engage in such a transaction or trade" may accept digital currencies like BTC even if they are not yet officially recognised.
Particularly noteworthy is the central bank's stated intention to review "applicable laws and regulations meticulously in cooperation with other relevant authorities" before making any modifications.
The BON's changing attitude toward digital currencies suggests a possible shift in policy toward these new payment methods.
Ripple gets some relief amid ongoing lawsuit with the SEC
The SEC sued Ripple in December 2020, alleging that it had sold unregistered securities, arguing that XRP is a security rather than a commodity. According to the SEC, the firm fraudulently raised $1.3bn via the sale of tokens. Ripple disputes the allegations.
It became one of the largest battles a cryptocurrency startup and government regulators have fought. After a year of trial testimony and motions, it was still unclear who had the upper hand.
The records written by former SEC director of company finance William Hinman were ordered to be released on 29 September by the district court judge in the case, Judge Analisa Torres.
According to Ripple's interpretation of the hidden papers, Hinman may have commented that ether (ETH), the native coin of the Ethereum blockchain, is not a security. Hinman said this in his June 2018 lecture at the Yahoo Finance All Markets Summit.
When defending against the SEC's claims in the December 2020 case, Ripple aims to use Hinman's paper as proof that the XRP coin used on its blockchain should not be considered a security, similar to ether.
XRP/BTC forecasts: Targets for 2022, 2025 and 2030
According to CoinCodex, on 23 September, XRP peaked versus BTC at 0.00002842. This was the highest level XRP reached against BTC in the preceding 30 days. The lowest exchange rate for the last thirty days was 0.00001575 BTC on 13 September, indicating volatility of 17.14%.
Meanwhile, algorithm-based forecasting services have issued bullish long-term Ripple to Bitcoin forecasts:
DigitalCoinPrice’s algorithm-based XRP/BTC forecast for 2022 estimates, as of 7 October, that BTC could trade at an average price of $20,736 in 2022 and XRP at $0.49. Its XRP/BTC forecast for 2025 saw BTC reaching $80,727.83 and XRP $2.03. In 2030, it expects BTC to hit $278,216 and XRP to $6.84.
The platform did not issue a direct XRP/BTC forecast for 2022, 2025 or 2030.
PricePrediction expects BTC to trade at an average price of $22,371.31 in 2022 and $62,268.96 in 2025. The forecaster’s predictions for XRP saw the coin trading at an average price of $0.54 in 2022 and $1.63 in 2025. Its XRP/BTC forecast for 2030 estimates that BTC could trade at an average price of $407,198.85 in 2030 and XRP at $10.56.
The platform also did not issue a direct XRP/BTC forecast for 2022, 2025 or 2030.
Remember that analysts and algorithm-based price targets can be wrong when looking for XRP/BTC predictions. They are based on technical analysis and historical price action. Importantly, past performance is no guarantee of future results.
It’s essential to conduct your own research before trading. Remember that your decision to trade should depend on your market expertise, your portfolio spread, and how comfortable you feel about losing money. You should never trade money you cannot afford to lose.
FAQs
Why has XRP/BTC been dropping/rising?
The XRP/BTC exchange rate has been increasing due to favourable demand for XRP and positive market sentiments due to an interim victory in the ongoing lawsuit against the SEC.
Will XRP/BTC go up or down?
No-one knows for sure. The future of XRP/BTC could depend on the result of the SEC's lawsuit against Ripple Labs. If the court rules in favour of Ripple Labs, the price of XRP might increase, or vice versa.
Remember market events, as well as market participants’ reactions to them, are very difficult to predict accurately. Always do your own due diligence before making a trading or investment decision. And never trade or invest more than you can afford to lose.
When is the best time to trade XRP/BTC?
Your preferences, risk tolerance, and trading strategy will dictate the optimal time to trade XRP/BTC. The cryptocurrency markets are open 24 hours a day, seven days a week, and things may change overnight. Therefore, you should exercise extreme caution, and never invest more than you can afford to lose.
Is XRP/BTC a buy, sell or hold?
As of 7 October, CoinCodex indicates that XRP is bullish and bitcoin is bearish, suggesting that it could be a bad time to trade XRP for Bitcoin.
However, analysts and algorithm-based forecast websites can and do get their forecasts wrong. Always do your own research before making an investment decision. And never trade or invest more than you can afford to lose.
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