San Francisco-based fintech giant Ripple ended 2017 with a bang. The company’s cryptocurrency, XRP, surged in late December then started 2018 by eclipsing Ethereum’s global market cap. According to CoinMarketCap, XRP’s cap was more than $93.4 billion by Tuesday morning. XRP, which cost less than a fraction of penny at the same time last year, sold on Tuesday for around $2.41 per token. It is now second only to bitcoin in terms of overall speculative value. However, market caps aren’t necessarily the best way to compare cryptocurrencies.

Unlike bitcoin, XRP was created for enterprise users by a startup. It still runs on a partially centralized commercial network. “Ripple is not at all decentralized. It is actually the antithesis of decentralization,” Arianna Simpson, founder and managing director of the crypto-centric digital assets fund Autonomous Partners, told International Business Times. “I consider Ripple a different creature.”

Ripple works with dozens of leading banks around the world, although few actually use both XRP and Ripple's proprietary software solutions. This hasn’t quelled cryptocurrency fans’ rush to buy XRP tokens. Forbes reported Ripple chairman and former CEO Chris Larsen now has an estimated net worth of around $37.3 billion, making him one of the richest moguls in the cryptocurrency industry. Ripple’s current CEO, Brad Garlinghouse, reportedly owns a 6.3 percent stake in Ripple and as a net worth of at least $9.5 billion. This raises concerns for many analysts, who worry the staff’s personal XRP holdings will create a conflict of interest when it comes to insider knowledge of pending deals.

Ripple CEO Brad Garlinghouse
Ripple CEO Brad Garlinghouse Eric Piermont/AFP/Getty

The rising Silicon Valley giant may try to curb cynicism by prioritizing engagement with the broader cryptocurrency community. “I wouldn’t be surprised to see the price continue to rise because I know that the team has a number of community and marketing initiatives in Q1 and Q2,” Simpson said. “I think a lot of that will drive interest. I also think the fact that XRP is now on Bloomberg terminals will drive a lot of awareness and interest from Wall Street and traditional financial players.”

Some XRP fans now predict the token will surge to $5 or $10 in early 2018. Yet it’s incredibly difficult to offer evidence-based XRP price predictions because the token is still deemed worthless by many cryptography experts. Sure, it offers a blockchain-based currency for fast, international payments. It’s perfect for high volume, low value transactions. But community-driven initiatives such as litecoin could offer similar features if scaling solutions continue to progress in 2018.

“Originally their pitch was like, we’re going to replace SWIFT and work with all the banks,” Simpson said. “After talking to a lot of people actually at these banks, in reality it doesn’t seem like this is very much the case. Some of them have done pilots. And the pilots have seemingly gone pretty well. But it’s not at all clear if this is of any meaningful scale.”

Blockchain veteran Ryan Selkis, one of the founding members of the Digital Currency Group, wrote XRP is “not required to use Ripple’s software, so unless banks are adopting the currency as a new global reserve, it doesn’t make sense.” Ari Paul, CIO of BlockTower Capital, tweeted any timely statement about XRP is inherently a statement about the parent company Ripple.

XRP does not represent stocks or shares of any kind. So if a currency doesn’t have proven use cases or unique value beyond the parent company, what other factors might drive up XRP prices in 2018?

Ripple investor and Digital Currency Group’s director of development, Meltem Demirors, remains optimistic about Ripple’s outlook in 2018. Only a few cryptocurrency exchanges sell XRP, so it’s a little early to compare consumer use cases with more widespread tokens like litecoin. All things considered, Demirors sees XRP as a young cryptocurrency brimming with new possibilities.

“It’s incredible to think about the fact that Ripple is the most valuable private company in Silicon Valley right now – more valuable than Uber. The Ripple protocol launched in 2013,” she told IBT. “I think people are far too focused on the argument that Ripple is 'centralized.' Many protocols are centralized in their development, application ecosystem, and token ownership.”

Demiror's own calculations suggest it would take an inflow of at least $350 billion to drive XRP prices up to $10, which would be very difficult to achieve. Regardless of price, the intrinsic value of XRP tokens will change if more diverse consumers adopt this technology. “I’d imagine the Ripple team is already thinking of ways to use some of the XRP and cash on their balance sheet to help further develop XRP’s position as a key blockchain protocol for value transfer,” Demirors said. “We saw Ethereum go through the same thing – just takes time and talent – and right now competition for attention is fierce.”

Asheesh Birla, head of product at Ripple, told IBT his team's 2018 roadmap will focus on engagement with many different communities of developers. "The XRP ledger is open for anyone to develop on and we’ve seen a lot of interest from developers,” Birla said. “We’re very active now on all social channels...You can anticipate Ripple will continue to improve its features for developers to use the XRP ledger directly.” So far, some of those independent use cases include experiments with automatic invoice processing and token exchanges using the XRP blockchain network.

It will certainly take time to earn public trust, especially with Ripple’s staff holding such a hefty chunk of the XRP supply. The same case may be true for bitcoin core developers or Ethereum founders, but it feels different to the public when the holders are institutional staff instead of volunteers working on an open source project. "You cannot sell [based] on information,” Birla told IBT. “We talk about this [ethics] almost weekly. It’s a huge part of our company culture.”

Matt Liston, an advisor to several blockchain initiatives such as Gnosis and SpankChain, told IBT he hopes cryptocurrency companies will establish a set of best practices to limit employee trading and eventually offer some type of protection for token holders. “There’s not currently clear insider trading laws for cryptocurrency,” Liston said. “Another thing I’m worried about is a conflict of interest between projects that are both issuing both traditional equity and tokens...because of the lack of regulatory environment, there are no real protections for the token holders but there are protections for the equity holders. This is something that very much needs to be disclosed at the very least.”

Miguel Vias, Ripple’s head of XRP markets, told IBT in June his team plans to diversify the network and encourage wider distribution of XRP tokens. Plus, Ripple is far better poised to confront legal and ethical questions than most fintech companies in the blockchain industry. Benjamin Lawsky, New York's former superintendent of financial services, sits on Ripple’s board of directors.

“It may appreciate significantly, but that doesn’t mean eventually it won’t come crashing down even below where it is right now,” Simpson said. “I would caution people against buying things that just seem cheap...I can think of many reasons why you might want to hold [XRP], but amongst those we should not count the fact that it’s cheap.”

Update: This article was updated to include statements from Ripple staff.