For a brief while, the Ripple Labs-related digital asset XRP saw an astounding rise to $50 on the Gemini cryptocurrency platform. Although fleeting, this price increase temporarily propelled XRP’s market capitalization into the billions of dollars. Around 20:30 UTC on Thursday, there was a brief price increase, but it quickly returned to the going rate on other exchanges.
The sudden and unusual price change is ascribed to a possible lack of liquidity in the hours just after XRP was relisted on the Gemini platform. In this case, it’s possible that an investor placed an exceptionally large market order that was completed at an extremely high price.
Interestingly, price chart data shows that XRP briefly sustained higher price levels than the whole market. Some observers suggest that the surprise increase may have been caused by a selling putting a “spoof order” at the $50 per XRP level, which unintentionally caused a buyer to execute it by making what is known as a “fat-fingered” deal.
A deeper look at market depth data indicates that Gemini exchange liquidity for XRP is still just moderate. A 2% price change on this platform may be induced with only a $37,000 transaction. In comparison, a considerably higher order of at least $2.2 million would be required to execute a comparable price movement on a market like Binance.
Following XRP’s reinstatement on the Gemini market, this most recent incident had place. Following a court verdict in favor of Ripple Labs in July, the decision to relist XRP was made. The court found that trading XRP on exchanges for digital assets did not amount to the marketing of investment contracts. This judicial win disproved earlier claims that Ripple Labs had illegally marketed and sold XRP to American clients as a security without properly registering with the Securities and Exchange Commission (SEC) of the United States.
XRP is currently selling at about 63 cents at the time of writing. This occurrence serves as a reminder of the intrinsic volatility and sensitivity of the cryptocurrency markets, where even transient abnormalities have the potential to cause substantial market fluctuations and attract the attention of both traders and experts.