Ripple (XRP) Flexes Weakly Despite $50 Million MoneyGram Deal
The news helped Ripple’s native token XRP rise by more than 8 percent on the day. The blockchain asset established an intraday high towards $0.463 but, down the road, failed to continue the upside action.
The XRP-to-dollar exchange rate today corrected by as much as 7.15 percent, falling to an intraday low of $0.430 on Coinbase exchange. As of 0810 UTC, the pair was attempting a modest recovery towards $0.437, which is 4.60 percent higher on a 24-hour adjusted timeframe. That brought XRP’s market capitalization close to $18.46 billion.
Friends Without Benefits
As part of the deal, MoneyGram agreed to integrate XRP in their day-to-day money transfer services. The move could assist Ripple in introducing their token across the 200 countries and territories where MoneyGram currently serves. It also offers an excellent opportunity for Ripple, to benefit from MoneyGram’s remittance operations worth $600 billion.
The news should ideally prompt traders and investors to increase their stakes in XRP. Nonetheless, the money holders appear to have been preferring a wait-and-watch approach. One of the reasons could be bitcoin. The leading cryptocurrency is proving to be a better hedge against weak macroeconomic fundamentals like the Hong Kong protests and the US-China trade war.
At the same time, it is the Ripple that is investing millions of dollars into MoneyGram on the promise of XRP adoption. The San Francisco firm is not going to offer XRP holders the profits it would make from its MoneyGram investments. Also, how would MoneyGram manage its remittance services given XRP’s underlying price volatility is a thing remain to be seen.
Scott Melker, a prominent cryptocurrency analyst, further noted that the stock price of MoneyGram went up by 140 percent after hour on the Ripple news.
“To be clear, Ripple is investing in Moneygram, hence the greater movement in the actual stock, and not the coin,” said Melker. “Ripple paid $4.10 a share for a stock that was trading at $1.45.”
This post was last modified (EST) on 18/06/2019 12:31