Why are cheap altcoins skyrocketing?

Ripple on the rise: why are cheap altcoins skyrocketing?

While the crypto community’s eyes were fixed largely on Bitcoin’s drive to surpass its all-time high and some healthy recoveries in the world of decentralized finance, the value of altcoins suddenly skyrocketed – with Ripple (XRP) up 200% since the beginning of November. But why did all this happen?

Although there were no significant events that could trigger a wave, Ripple and the other altcoins are continuing to increase in value.

Last week XRP recorded a 139% increase, corresponding to most of Bitcoin Bank its annual movements in a phenomenal rally. Today, Ripple’s value has been at its highest for almost three years.

According to market data, XRP was the best performing cryptocurrency in the last few days among the top 100 assets, along with XRP’s crypto cousin Stellar Lumens (XLM).

What forces were involved in Ripple’s propulsion in the stratosphere? According to some commentators, XRP’s huge movement may have been triggered by a movement started on social media.

The early intervention of TikTok

TikTok is gaining a reputation for rapidly inflating crypto assets significantly. In the summer, a small group of influencers tried to encourage their followers to invest in Dogecoin in an attempt to make a significant return on their investments.

It seems that Ripple has become a new target for creators of viral content on the social platform and new content seems to arrive in large volumes, marking the rise in the price of the currency.

Eric Wall, Chief Investment Officer of Crypto Hedge Fund Outfit Arcane Assets said:

„TikTok is the world’s most sophisticated tool for creating and monitoring viral phenomena.

Wall’s words indicate that the power of social media can be strong enough to actively manipulate the markets. While this could be good news for some investors, it could also undermine the integrity of the crypto ecosystem that prides itself so much on decentralisation.

Adding fuel to the fact that TikTok has raised the price of XRP is proof that the number of unique portfolios buying Ripple has risen by 24,408 – the highest number on the network since 1 May 2020.

Although speculation driving crypto currency prices is nothing new, today there is a wide range of crypto exchanges that can support masses of new investors operating on a specific currency. This could mean that we may see further artificial price increases in the near future driven by viral social media postings.

Optimism driven by old news?

However, not everyone was ready to buy during the unexpected growth of XRP led by TikTok. Benjamin Pirus speculated that the significant increase might have been due to the emergence of old currency news.

Prior to the rapid increase in value, information emerged about Bank of America’s involvement in Ripple’s payment network, RippleNet, based on a brief report from Ripple News. This may have fuelled a new generalised confidence in cryptocurrency, but it has since emerged that Bank of America has been a member of RippleNet since March 2019.

This indicates that there is indeed a lack of new developments related to XRP, but sometimes a little speculation is enough for prices to rise rapidly.

Pirus also suggests that the rise in Ripple may be due to widespread investor interest in altcoins as a result of the profits that have recently been made by bitcoins. The famous crypto commentator, Josh Olszewicz, predicted the rise in XRP in the days leading up to the currency surge, pointing out that it is likely to be „BTC’s profits entering the altcoins“ noting that this is „probably the most bullish moment ever seen in recent years“.

Repurchases help to increase altcoin Ripple profits

Another factor determining the increase in Ripple could be repurchases. During the third quarter of 2020, Ripple purchased $45.5 million of XRP in a buyback programme. The idea behind this move was to help keep markets healthy.

The sales summary in the third quarter report showed total purchases of $45.5 million, while in previous quarters there was no evidence of ongoing repurchases. Subsequently, the report stated: