Why Coinbase listing didn’t boost XRP price

There was a general feeling that when Coinbase announced it was listing XRP on its Coinbase Pro platform there would be a corresponding leap in the value of Ripple’s native token. There was some movement on the day of the announcement (25th February) with XRP shooting up by 10% in value, but that is about as exciting as it got.

Furthermore, when Coinbase then announced on 28th February that it was adding XRP to Coinbase.com, as well as the exchanges’s Android and iOS apps, the response was flat.

The analysts’ analysis

While crypto consumers might be somewhat surprised by this lack of activity, analysts were less so. According to crypto expert Charles Bovaird, writing at Forbes, several analysts were of the opinion that they had never expected anything else. Jeff Dorman, cofounder and head portfolio manager at Arca Funds told Bovaird: “I’m not surprised by the lack of price action for XRP. First, XRP has been plagued by negative press this year and as a result, the token has been lagging the broader market all year.”

Dorman also explained that the 10% rally on the 25th February had amounted to much more, because “those gains were quickly erased when the people who bought before the news sold into those buying after the news.”

Marouane Garcon, managing director of crypto-to-crypto derivatives platform Amulet, shares Dorman’s view. “I can’t say that I’m surprised by the lack of movement. Throughout this entire bear market news and public developments haven’t been able to spark any sort of uptrend.”

However, Garcon did explain what he thought would move XRP’s price — adoption. He said, “In XRP’s case, I think banks utilizing XRP in their daily operations is what’s going to move their market.”

Big announcements don’t always bear fruit for XRP

Joe DiPasquale, CEO of cryptocurrency fund of hedge funds BitBull Capital also claims that he and others have noticed something ‘interesting’ about XRP’s price movements: “We’ve noticed the market anticipate many of Ripple’s moves, resulting in what might seem as counter-intuitive pricing over major events,” he told Bovaird, adding, “For example, during both of their last two conferences, where they announced major business development deals, the price of the XRP token dropped.”

The crypto ecosystem is the ultimate decider

All the analysts seem to agree on another viewpoint, “the different digital currencies that make up the broader market tend to move in tandem.”

So, the reason Coinbase didn’t move XRP’s price upwards as much as might have been expected is down to Ripple also being subject to the waves within the larger crypto pricing ecosystem, and these don’t always work in harmony with big announcements.

Facebook and Telegram move in on crypto

Although it has taken Internet messaging giants a while to join the cryptocurrency scene, it was inevitable that they would become involved at some point. So, it’s no surprise to see a New York Times article by Nathaniel Popper and Mike Isaac discussing how “Facebook, Telegram and Signal, are planning to roll out new cryptocurrencies over the next year that are meant to allow users to send money to contacts on their messaging systems, like a Venmo or PayPal that can move across international borders.”

Facebook’s secretive actions have been much discussed in the last few weeks, as they have been employing blockchain engineers and crypto experts, and has been in talks with crypto exchanges, but as yet haven’t revealed their precise plans. It is believed that Facebook is working on a token for Whatsapp that would allow users to send the tokens to other users almost instantly.

Telegram, the messenger channel used by numerous crypto-related projects, is also working on a digital asset in some form. Meanwhile, Signal, which is a specialist messaging service used by technology specialists and those working on privacy issues, is also said to have a token in the works.

The messenger app advantage

The advantage companies like Facebook and Telegram have over bitcoin and other cryptocurrencies is this: they already have millions and millions of users; Telegram has 300 million worldwide and Facebook has billions. In other words they have a global reach that the crypto projects as yet don’t have and as a result Facebook and Telegram can make the digital wallets used for cryptocurrencies available, in an instant, to hundreds of millions of users.

Eric Meltzer, co-founder of a cryptocurrency-focused venture capital firm, Primitive Ventures, remarked, “It’s pretty much the most fascinating thing happening in crypto right now. They each have their own advantage in this battle, and it will be insane to watch it go down.”

Regulations may be problematic

However, the likes of Facebook and Telegram may face the challenge that existing crypto platforms know all too well — the issue of regulations. Popper and Isaac state that the messaging companies are likely to face many of the same regulatory and technological hurdles that have kept bitcoin from going mainstream

Will it be a crypto token or a stablecoin?

It is likely that Facebook will opt for a stablecoin solution, although it is rumoured that its token will be pegged to a basket of currencies rather than just the US dollar. This will make the token unattractive to speculators, but attractive to consumers who would be able to use the token to pay for goods knowing that it has a stable value. Furthermore, as Popper and Isaac suggest, “Facebook could guarantee the value of the coin by backing every coin with a set number of dollars, euros and other national currencies held in Facebook bank accounts.” As Meltzer say, it is going to be exciting to watch how it plays out with Facebook and Telegram.

Is Google making the blockchain searchable?

I came across an interesting article on Forbes the other day by Michael del Castillo. He tells a story about data scientist Allen Day, a former Google employee, who while looking at some of the tools he developed there, saw something puzzling. What he saw was “a mysterious concerted usage of artificial intelligence on the blockchain for Ethereum.”

Day was able to look into its blockchain and see a “whole bunch” of “autonomous agents” moving funds around “in an automated fashion.” Although Day has no idea who created the AI, he suspects “they could be the agents of cryptocurrency exchanges trading among themselves in order to artificially inflate ether’s price.”

Day also remarked that he didn’t believe this was the work of a single exchange, but is rather a group effort. Part of Day’s job is anticipating demand for a product before it even exists, and in the light of what he has seen, he believes that making the blockchain more accessible is the next big thing.

Let’s not forget that Google made the Internet more usable, bringing it billions in revenue, and if Day is correct in his predictions it could have another major pay day by making the blockchain searchable. Del Castillo says if it does, “the world will know whether blockchain’s real usage is living up to its hype.”

Day has already been working on this with a team of open-source developers, who have been loading data for bitcoin and ethereum blockchains into Google’s big data analytics platform called BigQuery. And, with the help of lead developer Evgeny Medvedev, he created a suite of sophisticated software to search the data.

Day is hoping that his project, known as Blockchain ETL (extract, transform, load) will bring Google’s revenues from cloud computing services up to the level of Amazon and Microsoft. Google is some way behind both of them, but it will struggle to match Amazon’s revenues of $27 billion from cloud services, because Amazon has been in the blockchain game since 2018 with a suite of tools for building and managing distributed ledgers. And Microsoft got into the space in 2015, when it released tools for ethereum’s blockchain. These two companies are focused on making it easier to build blockchain apps, whereas Day wants to reveal how blockchains are actually being used, and by whom.

Day has been demonstrating how his Blockchain ETL could function by examining the hard fork that created bitcoin cash (BCH) from bitcoin. “I’m very interested to quantify what’s happening so that we can see where the legitimate use cases are for blockchain,” Day says. “Then we can move to the next use case and develop out what these technologies are really appropriate for.”

Day is now expanding beyond bitcoin and ethereum. Litecoin, zcash, dash, bitcoin cash, ethereum classic and dogecoin are being added to BigQuery.

It seems Google is waking up to blockchain and is now powering ahead by filing numerous patents related to the blockchain. The company is also encouraging its developers to build apps on the ethereum blockchain, and GV, Google’s investment division has made some investments in crypto-related startups.

Is the crypto community just smoke and mirros?

You’ve probably noticed that ‘community’ is a buzzword in the crypto sphere. There isn’t an ICO that doesn’t refer to building its ‘community’, which is really another way of talking about their investors, because that is what they are. But ‘community’ sounds warm, fuzzy and friendly when compared with the ‘investor’, which instead suggests neutrality, detachment and anonymity.

Why crypto geeks chose ‘community’

In the traditional world of business it is very important to build loyalty among clients and customers; that’s one of the functions of great branding, but the crypto startups focused on the concept of ‘community’ at the start, in my opinion because they were operating on the fringes and therefore wanted to use a word that suggested a coming together of like-minded people, as well as a sense of equality between those who developed the crypto projects and those who basically crowdfunded them.

In the early days of crypto, this rather ‘liberty, equality and fraternity’ approach served a good purpose; it strengthened belief in a new technology by making everyone feel they had skin in the game, even if an individual’s financial commitment to a new project was $100, let’s say. However, as the ICO took off and every project wanted to build followers who would buy into it, what had been a collection of believers turned into, as Michael K. Spencer writes in his article for Medium, “communities more prone to pump and dump” who were never really loyal followers.

Now crypto projects need to get real

Spencer’s argument is, and I agree with him, is that the so-called ‘communities’ built up by ICOs on Telegram and elsewhere are not as useful to projects as they were once thought to be. The reason for this is that the crypto world has moved on significantly since the launch of bitcoin. Crypto projects now need real clients and products with a real world use.

Communities show no loyalty

In short, a project’s community that has come together just for the Airdrop, or whatever freebies a project wants to hand out, is rarely loyal. These marketing tools may build numbers of followers on social media quite rapidly and make a project look as if it has broad support, but most of those people are just there for the giveaways and once they have them, they’ll be off.

Spencer says, “Crypto saying that its community is its best resource, is like Facebook saying it’s valuable because it has over 2 billion users.” Building community is not where crypto projects should be focusing; they should focus more on real world applications, demonstrate utility and by doing so attract loyal clients and investors.