Whereas Bitcoin (BTC) has hogged nearly all of the mainstream limelight in the case of the current bullish motion seen within the crypto market, the altcoin XRP has additionally surged over the previous month, breaking out of a multiyear downtrend to regain some beforehand misplaced momentum. For instance, in March, the value of XRP towards the U.S. greenback was hovering across the $0.15 mark, solely to scale as much as a peak excessive of round $0.80 by the primary week of December.

Nonetheless, regardless of the entire aforementioned optimistic developments, the worth of XRP has not been in a position to break previous the psychological barrier of $1. Not solely that, even with information of the upcoming Flare Community airdrop, for which a blockchain snapshot occurred efficiently on Dec. 12, the third-largest cryptocurrency by whole market capitalization has not been in a position to make any main financial strides and presently sits at round $0.50.

The Flare Community, a startup backed by Ripple, started the method to distribute Spark (FLR) tokens at 12:00 a.m. UTC on Dec. 12 in a one-to-one ratio primarily based on the XRP holdings that had been held on taking part exchanges. Moreover, even Ethereum wallets like Metamask and Ledger are permitting their customers to take part within the occasion. Although balances might be settled this month, the ultimate token distribution will happen throughout 2021.

Technically talking, the Flare Community seeks to plot a two-way bridge connecting XRP to the Ethereum ecosystem by integrating the Ethereum Digital Machine into its digital framework. In consequence, it would change into attainable to make use of varied superior good contracts on the XRP Ledger.

FLR airdrop indicative of one thing massive for XRP?

Many new initiatives providing decentralized finance options have cropped up just lately inside the cryptosphere. In the meantime, the “previous time” digital currencies like XRP have from the very starting operated in their very own sphere, boasting of sturdy communities and networks of companions.

Thor Chan, CEO of AAX — a cryptocurrency trade — instructed Cointelegraph that XRP’s transfer to associate with the Flare Community is about greater than only a easy airdrop, because the transfer will deliver good contract functionalities to the XRP Ledger and the neighborhood, including: “Regardless of buying and selling downwards for the previous week, $0.9 continues to be inside attain within the quick to medium time period for XRP, particularly if sentiment round BTC stays as bullish because it’s been in current weeks.”

Reuben Merre, CEO of cold-wallet options supplier Ngrave, believes that the Spark token drop ought to be handled as a “purchase the rumor promote the information occasion.” He’s assured that by this time limit, the worth of the airdrop has already been factored into the worth of XRP and that, if something, an additional draw back past the $0.5 degree appears possible.

What’s inflicting XRP to stagnate?

The Ripple venture has at all times appeared extraordinarily promising, with many believing that the ecosystem was precisely what the banking sector wanted to revolutionize its present, outdated transactional protocols. Nonetheless, following the bulletins made by China and a number of other different international locations relating to the event of their very own central financial institution digital currencies, the necessity to globalize Ripple has begun to dwindle.

Mikhail Karhalev, an analyst for Foreign money.com — a London-based tokenized-assets trade — instructed Cointelegraph that during the last couple of years, Ripple has been confronted with an rising quantity of competitors not solely from Stellar and different related unbiased initiatives however, extra importantly, from state governments across the globe. He added:

“The probabilities of successful such a race are extraordinarily small. Furthermore, the SWIFT system additionally introduced the launch of its ‘gpi On the spot service’, which is able to enable customers to ship cross-border funds across the clock and in solely a matter of seconds.”

Lastly, it stands to cause that the distribution of Flare Community’s venture tokens might play a unfavorable function in relation to XRP’s worth as a result of shopping for a token towards the background of an airdrop looks like an try to grab extra revenue. For instance, the truth that XRP’s worth crashed by 8% following the snapshot means that some folks held onto XRP as a method of benefitting from the airdrop however then offered as quickly because the Flare Community recorded their XRP holdings.

Ongoing bull wave is probably not indicative of XRP’s future

Although XRP has carried out strongly because the final week of November, it appears as if the first cause the altcoin has been in a position to garner a lot market assist just lately is because of Bitcoin surging to an all-time excessive of $19,892. Moreover, big-name gamers investing primarily in Bitcoin might have pushed newer, extra informal crypto fanatics to spend money on different currencies.

On this regard, through the month of November, BTC went up by 40%, whereas Ether (ETH) grew by 53% and XRP by 166%. Nonetheless, whereas Bitcoin and Ether reached their highs on the very finish of November, Ripple reached it on Nov. 24 — demonstrating a rise of 230% since Nov. 1 — after which it barely fell in value. Karhalev identified: “The sooner momentum development was probably associated to the Flare Community airdrop, as crypto fanatics had been keen to purchase extra XRP to be able to get extra FLR and thus double their advantages.”