The last two weeks of 2017 provided an exclamation point to the past year in the cryptocurrency world – more drama and a coin that surged to overtake Ether in the number-two spot. Ripple started the year at $0.006 and at the time of writing was priced at $1.96.
The company has raised $93m in venture financing to date, much of it from strategic investors including Santandar, in addition to its coin offering. While Ripple’s technology is being used to test interbank transfers at several multinational banks – with 100 banks signed to its platform – it is unclear whether the company’s token (XRP) is being used for these transfers. Moreover, the company will be releasing 1 billion XRP into the market on a monthly basis starting this month out of its corporate holdings.
It will be crucial to see how Ripple as a company manages its token float, and what benefits token holders will gain from corporate activities. I will be watching XRP to determine whether these tokens are securities, utilities or purely a speculative asset.
Bitcoin, after a 30% drop on December 22, recovered much of its value, although it retreated to $12,000 briefly after news that South Korea will be scrutinising cryptocurrency exchanges there. A large percentage of cryptocurrency trading originates from South Korea and Japan, and several news articles have recently reported how widespread “cryptomania” is in South Korea.
For those of us in the space, the news reports were not new news, and certainly not alarming. South Korea is requiring exchanges to perform standard know-you-customer and anti-money laundering checks which were not needed before. This is all a part of the maturation of the industry and was expected to happen.
I expect 2018 will see more regulation in the sector as more institutional capital comes in. In the cryptomarkets, I also expect to see continued volatility as profit-taking occurs in the new year. Blockchain technology will be adopted across more industries and sectors, and we will start to see which of the token offerings are able to deliver products and projects. It will be an even more exciting year for the sector than 2017 was.
