Ripple News Update
Although Yahoo! Inc. went down in flames in North America—Verizon Communications Inc. (NYSE:VZ) bought its core assets at firesale prices—Yahoo! Japan (TYO:4689) maintains a strong presence in East Asia.
Now the platform is looking to leverage its popularity by opening a cryptocurrency exchange in Japan. There’s a lot to unpack from this development. The obvious takeaway, however, is that this is good for cryptos that lean heavily on East Asian trading volumes, including Ripple (XRP).
More than 40% of XRP trading volumes currently come from South Korea. It would benefit Ripple to appear on more platforms, as the concentration exposes XRP prices to political risk, but that decision rests with the exchanges. Not Ripple.
Investors keep hoping that Coinbase will solve Ripple’s problems by adding XRP functionality to GDAX. Maybe that bet will pay off. Maybe it won’t. In either case, I don’t think it presents the most convincing case for soaring XRP prices.
The better argument is that XRP adoption will pick up in East Asia, leading to bullish price action out of Japan and Korea, that will, in turn, prop up XRP prices once more. Yahoo! Japan’s announcement fits perfectly with this alternate theory.
Why, you ask? Well, because there are two trends sweeping through Japan’s cryptocurrency market:
- The rising hunger for credibility. Hackers recently stole $500.0 million from a Japanese exchange. Since it happened because the exchange was careless, regulators tightened security requirements at all trading venues. They also suspended several exchanges, thus creating an opening for a new exchange with enormous brand name recognition. Yahoo! Japan could fill that void. It has both the money and bona fides needed to secure investors’ faith in its security systems.
- Ripple’s growing influence over Japanese Banking Consortium. Most investors forget that Ripple is in business with 61 Japanese banks. It recently launched the world’s first blockchain app (“MoneyTap”) with some of these partners, meaning that the relationships are getting tighter and more entwined. It would be madness to add a new exchange in Japan without adding XRP, particularly if it were a high-profile exchange like Yahoo! Japan.
This is not the kind of Ripple news that launches XRP to the heavens, but it can help bring money off the sidelines. At least that provides movement in a positive direction.
Over time, I expect Japan to play a bigger role in XRP prices. The potential success of MoneyTap could act as a catalyst for this trend, meaning that we should watch the app’s download numbers in order to make our Ripple price prediction.
However, the app hasn’t been out for that long—it only premiered this month. With that in mind, we’ll have to reaffirm our previous Ripple price prediction, which showed XRP prices reaching $10.00 by the end of 2018.