On February 8, the price of XRP reached $0.52 because investors started feeling more positive after being worried about a $120 million theft from Ripple Labs co-founder Chris Larsen’s digital wallet on January 31.
On-chain data trends shows that whale investors on Ripple’s XRP Ledger ecosystem are now regaining confidence following exchanges and law enforcement response to the hack.
Can the price of XRP go up to $0.60 as it starts to recover?
XRP whales regain confidence after initial negative reactions
On Jan. 31, ZachZBT, a popular person on X with 493,000 followers, warned that hackers broke into a wallet owned by Chris Larsen, who helped start Ripple Labs.
From Jan. 30 to Feb. 3, the price of XRP fell by 12%, hitting its lowest in 50 days at $0.48 because the market did not respond well to the news.
During that time, many big investors quickly sold off or reduced their investments because of increased market fear and uncertainty. But, data from the blockchain suggests that these large investors are becoming more confident again this week.
The chart from Santiment shows that on January 29, there were 1,986 wallets each holding over 1 million XRP, worth about $500,000. After a $120 million theft was reported, 29 of these big XRP holders either sold off or reduced their XRP, decreasing the total to 1,957 of these large wallets by February 3, the lowest in a month.
Richard Teng, the boss of Binance, said they took back $4.2 million stolen in a hack. The Ripple Labs team also said they are working with the police to get the rest of the money back.
These good changes seem to have made people less worried. Interestingly, the rising red line above shows that 17 big investors came back to the market between February 3 and February 7, because the number of large accounts went up to 1,974 recently.
XRP records $15 million whale inflows rebound phase begins
More XRP big investors after a big market event may mean good things for its value.
Basically, it means big investors are becoming more confident that, after looking closely, the hack probably won’t damage or weaken the network’s security as much as they first thought.
Santiment’s data shows that big investors began moving a lot of money into the market after the Binance CEO announced the seizure of funds on February 1, supporting this view.
The whales have put in $15 million in the past week, based on an average price of $0.50 over the last 7 days.
Usually, when big or expert investors quickly start investing, it means they think prices will soon go up. After the market gets over a major hacking event, smaller investors might also start investing, following the lead of the big investors who are optimistic about the future.
If things go as planned, the price of XRP might start to increase soon, and it could reach around $0.60 in the next few days.
XRP Price Forecast: Can it Reach $0.60?
Based on the analysis of blockchain activity mentioned before, large investors’ purchases have caused the price of XRP to rise, increasing by 2% in one day on February 7.
The upper Bollinger band shows that there is a strong chance prices will drop when they reach around $0.55.
If the bulls can overcome that obstacle, the price might rise above $0.60.
On the other hand, if the bears push the price of XRP down below $0.45, it could prove the positive price prediction wrong. However, based on what happened last week, it’s expected that the buyers will strongly support the price around the $0.49 area, which matches the lower line of the Bollinger bands.
Hong Kong announces consultation on crypto and fiat swaps
Hong Kong officials have started asking for people’s opinions on new laws to create a system for giving licenses to businesses that offer trading services for virtual assets, like cryptocurrencies, that don’t happen on formal exchanges.
The Hong Kong government says that some scams involve VA OTC operators. So, there’s a plan to control OTC services with AMLO rules to lower the risk of money laundering and financing problems.
The plan suggests that anyone in Hong Kong who wants to run a business that allows people to trade digital assets for money instantly must get a permit from the Commissioner of Customs and Excise (CCE). Also, the government wants to make sure all digital asset over-the-counter trading services are monitored by the CCE, who will check that these businesses follow rules to prevent money laundering and terrorism financing. This period for giving opinions on the plan will go on for two months, ending on April 12, 2024.
Last October, the Hong Kong Securities and Futures Commission said it was changing its rules on selling virtual currencies and other related needs because of what happened in the market and because people in the industry asked for it.
The department’s new rules say that virtual assets, like cryptocurrencies, are seen as complicated items and follow the same rules as other similar financial products. They mention cryptocurrency funds that are traded on stock markets and products from outside Hong Kong as examples of these complicated items.
Institutional adoption of crypto is growing. What can boost it further?
More companies are getting interested in cryptocurrencies, according to a recent survey by Coinbase. What’s going on, and why is this interest increasing?
Over time, more big organizations have started using digital currencies, showing that these digital assets are becoming a bigger part of the overall financial world.
A study by Coinbase in November 2023 showed that more big organizations are interested in investing in digital currencies. About one out of every three people asked said they bought more digital currencies last year, while only 17% bought less. Half of the people asked did not change how much they invested in digital currencies.
Their study also showed that 64% of people already putting money into cryptocurrency expect their company will invest more in the next three years. Surprisingly, no one thought their investments would go down during this time.
What do these results mean for the cryptocurrency market, and what are the main points about big organizations starting to use cryptocurrency?
Institutional adoption trends and highlights
Big organizations are starting to use cryptocurrency more, showing that digital money is becoming a bigger part of finance. Let’s look into the main trends and news.
Spot BTC ETF approvals and prospects for ETH ETFs
The U.S. SEC finally said yes to 11 Bitcoin (BTC) ETFs after waiting for years and getting many requests from big financial companies.
Approved ETFs include ones from big financial companies like Grayscale, Fidelity, and BlackRock. This shows there’s strong support from large institutions to offer regulated Bitcoin investments to more people.
Additionally, by setting up these ETFs on big U.S. stock markets, Bitcoin is seen as more legitimate and stable, which could make more individual and big investors want to buy it.
In just one month, these ETFs have gathered more than $25 billion in total assets, based on information from Blockworks.
The SEC’s choice also creates an example for saying yes to other financial products related to cryptocurrencies, like those connected to Ethereum (ETH).
A document from Feb. 6 shows that the SEC has delayed its decision on a new product suggested by Invesco and Galaxy Digital, big companies in managing assets and cryptocurrencies.
This delay is not the only one. Over the years, the SEC has been delaying decisions on many Ethereum ETF applications. Big companies like BlackRock and Fidelity are waiting for approval.
James Seyffart, an expert at Bloomberg, thinks that at first, the SEC might not allow Ethereum ETFs, but they could say yes to them by May 23 this year.
More and more big companies are starting to use cryptocurrencies, which could lead to more people accepting and investing in them.
JP Morgan’s programmable payments
In November 2023, JPMorgan Chase added a new feature to its blockchain platform, JPM Coin, for its business customers. This feature, called programmable payments, lets users set up and carry out money transactions automatically if certain conditions are met. It makes handling payments and money management easier and more adaptable.
Programmable payments use special computer programs called smart contracts to make transactions happen by themselves. This means that payments can happen automatically if certain rules are met, like when it’s a specific date or an agreement has been completed.
For example, the big international company Siemens AG was one of the first to use this feature, showing it’s useful for large companies.
Canton Network by Goldman Sachs and others
In May 2023, a group made up of 30 big companies like Goldman Sachs, Microsoft, BNP Paribas, Deloitte, and more, started the Canton Network.
The Canton Network is made to work with different blockchain systems together. It helps turn real-life assets into digital tokens using a special computer language called DAML by Digital Asset.
The Canton Network is important because it pays attention to RWAs, covering everything from usual financial tools to real things that can be shown digitally on a blockchain.
It creates new opportunities for asset owners, investors, and financial service providers by offering a standard way to show real-world assets on a blockchain.
These options mean easier ways to invest, quicker access to money, and the chance to make better and faster financial products.
How can crypto gain more institutional adoption?
Many reasons are causing more organizations to start using crypto and blockchain in 2024. Let’s look at each reason one at a time.
Tech innovations
Improving blockchain technology, especially by creating and using new layer-2 solutions and types of blockchains, is very important in the tech world.
In 2023, solutions designed to improve speed, efficiency, and affordability grew significantly.
As blockchain technology becomes more specialized for different industries or jobs, it might become more attractive for big organizations, leading to new uses and applications.
Regulatory developments
In 2023, the UK and the European Union made big steps in creating new rules for cryptocurrency activities.
This trend is likely to continue in 2024, leading to more rules that make things clearer and could increase use by large organizations.
Central bank digital currencies (CBDCs)
More and more central banks are looking into or starting to use digital currencies as we move into 2024.
The Bank for International Settlements predicts that by 2030, there could be up to 15 new types of digital money for everyday people and 9 for big transactions between businesses.
For CBDCs to work well, we need complete systems and plans that help different groups work together.
Cross-border payments
Banks and financial companies are starting to use crypto and blockchain for international payments because it helps make transactions faster and cheaper.
Big companies and payment groups are using blockchain technology to make their services better. This could help large financial organizations find new ways to improve what they offer.
Disclaimer: The information on this website isn’t meant to be taken as advice for investing money. Investing involves uncertainty, and there’s a chance you could lose your money when you invest.
