Ripple cryptocurrency hits a record high and now a market capitalization of more than $110 billion
- Ripple, the world's second-largest cryptocurrency by value, hit an all-time high above $2.90 on Wednesday.
- It marks a more than 45,700 percent rally in one year, according to CoinMarketCap.
- Ripple works with large enterprises and deals with large financial institutions, which has helped its digital coin, known as XRP, rally
Ripple, the world's second-largest cryptocurrency by value,
- hit a record high on Wednesday as its strong rally continues.
The digital coin jumped more than 18 percent to an all-time high above $2.90, according to CoinMarketCap. Ripple, or XRP, now has a market capitalization of $112 billion and remains solidly in second place to bitcoin, which has a market value of about $255 billion, according to CoinMarketCap. The website showed ripple has gained more than 45,700 percent over the last 12 months.
Ripple 12-month performance
The digital coin has climbed more than 120 percent over the last week, according to CryptoCompare.
What is ripple?
Unlike bitcoin, Ripple is a company that has created coin known as XRP that is aimed at enterprises. Ripple markets itself as a cross-border payments solution for large financial institutions based on blockchain technology.Currently, an international payment may take a few days to complete, and at a high cost. A headache for banks is high-volume, but low-value, transactions — the kind that Facebook might pay out to app makers, for example. These can often be expensive and unprofitable for banks because it takes a lot of effort to move the money and the percentage cut won't be as high as for a larger transaction.
Ripple is trying to solve this problem via its technology. XRP can be used by enterprises to get instant liquidity needed in a high-value transaction, without having to pay fees. XRP acts as a bridge between fiat currencies during a transaction. Ripple said transactions in XRP can be settled in four seconds, faster than any major cryptocurrency right now.
Why is it rallying?
Ripple has been conducting trials with a number of financial institutions, including American Express and Santander. Its price was also helped by news in December that Japan's SBI Holdings and SBI Ripple Asia, which was formed as a partnership between the two firms in 2016, created a consortium with Japanese credit card companies to utilize blockchain.
Blockchain is the technology that underpins cryptocurrencies, including Ripple.There is also a sense that investors are looking at alternative digital tokens beyond bitcoin. Bitcoin's dominance of the cryptocurrency market hit its lowest level ever on Tuesday, according to data from Coinmarketcap.com.