XRP Holds Strong After JP Morgan ‘Beats’ Ripple With Bank-Centric Crypto

Ripple and its crypto asset XRP have long been a nuanced discussion topic in the cryptosphere. Many have argued that the San Francisco-based fintech startup, viewed by Forbes as a company to watch, is sleeping in bed with banks along with other established old-world companies.

This may not exactly be the case, however, as a Wall Street giant recently revealed plans to release a digital asset that poses some threat to Ripple’s operations, but not the value of Bitcoin.

Ripple threatened by JPM coin?

In a move that came straight from the left box, JP Morgan Chase, the world’s sixth largest bank, went to CNBC and announced that it would launch an internal crypto asset appropriately named “JPM Coin”. According to a comment by Umar Farooq, head of the Wall Street institution’s blockchain division, the asset will be backed by physical US dollars and will initially be based on Quorum, JP Morgan’s private Ethereum-based chain. Eventually, the asset will be multi-chain, with interoperability solutions that allow JPM Coin to transact in different ecosystems.

Related Reading: JP Morgan: Crypto Value Unproven, Bitcoin (BTC) Could Drop To $ 1,260 In The Near Future

Farooq noted that his team intends to eventually turn the company into a multipurpose asset for the bank’s operations, while “anything where you have a distributed ledger, [that] includes companies and institutions “the stablecoin is used.

For now, however, the executive at JP Morgan made it clear that the newfangled offering is intended to strengthen the company’s internal but international corporate transactions. While this project may have a harmless premise, many crypto commentators quickly took to Twitter to notice that Ripple’s services and the XRP ledger’s function could come under fire.

“That’s a big slap in the face for Ripple,” @ Shaughnessy119 said. “Ripple’s target market is cross-border payments and remittances, and now JPMorgan’s efforts are a direct threat.” Https://t.co/vAb67rg2kq pic.twitter.com/80qDJ8U061

– Frank Chaparro (@fintechfrank) February 15, 2019

Tom Shaughnessy, the lead analyst at Delphi Digital (recently merged with 51Cryptos), told Bloomberg that JPM Coin was a “big slap in the face for Ripple” and stated that the fintech group’s cross-border payments and remittances could fail. Travis Kling, the chief investment officer at Ikigai, fully agreed with this opinion. He told Bloomberg that while Quorum is more like Google Sheets than Bitcoin, JPM Coin “clearly competes directly with Ripple Labs.”

Both Kling and Shaughnessy then drew attention to the flaws in the nature of XRP. Kling quipped that it was a “centralized cryptocurrency” and disproved the comments of Ripple’s CEO when the Delphi Digital researcher noted that the volatility of XRP will be “controversial” for institutions looking for cross-border payments .

And interestingly, a large part of the crypto community agreed. Esteemed Bitcoin trader Moon Overlord joked that he was shocked that JP Morgan created its own coin instead of XRP. Others noted that JP Morgan “killed the XRP dream,” along with other similar jokes.

Tushar Jain, a managing partner at Multicoin Capital, noted that banks never intended to use XRP for billing, and concluded that JP Morgan will “wipe the floor with Ripple”.

But despite all these comments, the value of the popular cryptocurrency has held up relatively strong.

XRP holds its own

According to data from Live Coin Watch, the asset has only seen a 1.1% loss in the past 24 hours while BTC is up 0.07%. While XRP’s slight underperformance may be cause for concern for some of its owners, some have actually concluded that the JP Morgan news did not have a significant material impact on the value of the asset.

Interestingly, analysts have mixed reactions to the fact that XRP barely moved when JPM Coin started trending on Crypto Twitter. Lucid TA, a technical analyst / fund manager, noted that XRP’s lack of volatility only emphasizes that more than 95% of crypto price movements are “driven by capital flows and speculation” rather than fundamentals. He added that the Wall Street bank’s own crypto asset was “extremely bearish” for Ripple in his view.

https://twitter.com/Lucid_TA/status/1096223962369904640

Another Bitcoin-friendly fund / investment manager, Crypto Quantamental, wanted to disagree, stating that failing to act on XRP is a “proof of concept” that the asset adds value to the financial ecosystem. While the trader admitted that Ripple won’t directly challenge SWIFT, it should be able to gain some traction in the business-to-business and small financial institutions space.

I face it. It’s bullish. It is a proof of concept for your added value. Very few other coins have that!

Ripple will NOT get the intranets of huge banks. One should have known that. B2B and many small financial institutions are their market

– Crypto Quantamental (@CryptoQF) February 15, 2019

However, while XRP has held up relatively strong over the past 24 hours, the asset is currently trending lower. And with more news on the traction that JPM Coin is gaining, XRP could lose some of its power in the long run.

Featured image from Shutterstock

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