Ripple News Update
A recent CoinDesk report brought to light that Ripple, the third-largest cryptocurrency in the world, has a fully functional derivatives market just across the pond. (Source: “Ripple’s XRP Just Might Be the Next Big Crypto Futures Market,” CoinDesk, March 20, 2018.)
The shocking part of this story is that, unbeknownst to most investors, this XRP market has been functional since October 2016. It’s quietly hummed along for 18 months.
The exchange is run by a British company called Crypto Facilities, which, despite being a relatively small fish in the derivatives market, could ignite a competitive rush to host XRP futures contracts.
“We have pretty good order books,” CEO Timo Schlaefer told CoinDesk, “And we’re in the process of working with some of the large market makers to draw that further.”
At the moment, Crypto Facilities settles nearly $30.0 million in daily trading volume on its exchange. The company wants to inject an adrenaline shot to those volumes by attracting institutional clients, a feat that is apparently becoming more likely by the day and could spur the competition out of complacency.
Rivals such as the Chicago Board Options Exchange (CBOE) and CME Group say they are open to an XRP futures contract, but we haven’t seen much action on the matter. This CoinDesk report might kickstart their efforts by demonstrating that XRP contracts can generate interest over a sustained amount of time.
But why is this important anyway?
Well, you might remember that BTC prices skyrocketed 300% ahead of the CBOE and CME adding Bitcoin futures contracts. Investors saw the futures market as a stepping stone to greater things.
It would help, for instance, convince the Commodity Futures Trading Commission (CFTC) to greenlight a cryptocurrency exchange-traded fund (ETF). It could also multiply trading volumes by drawing institutional investors into what had previously been a market for retail investors.
The same stands true for XRP.
I had assumed, like most people, that an Ethereum futures contract was next to Bitcoin on the CBOE and CME’s priority list. I’m not so sure anymore.
Here we have proof that an XRP futures contract is possible. It is a viable product. That evidence should hold sway over the CBOE and CME, thus putting XRP next in line for a derivatives contract. If I’m right, we could see XRP prices explode to the upside.
With this in mind, we are leaving our $10.00 Ripple price prediction unchanged.