Alternative digital currency ripple made some significant gains Friday, despite the wider market for cryptocurrencies seeing a sharp pullback.
Also known as XRP, it soared to $1.24 at 1:14 a.m. ET, and was up 25 percent over a period of 24 hours, according to data from industry website Coinmarketcap. The digital currency reached the key psychological $1 mark for the first time Thursday, and hit an all-time high of $1.38 that same day.
It briefly retook its place as the third-largest cryptocurrency, with a market value of $47 billion, a milestone it reached earlier this month. Ripple pared its gains later Friday morning. Its market capitalization fell bellow that of bitcoin cash, as XRP's price slid to 95 cents by 3:25 a.m. ET.
Interest in alternative cryptocurrencies — known as altcoins — tends to increase when there is too much activity congesting the blockchain network underpinning bitcoin, according to experts. But major altcoins including ethereum, bitcoin cash and litecoin were also seen trading lower Friday.
Bitcoin cash was surrounded in controversy earlier this week after cryptocurrency exchange Coinbase unveiled support on its service for buying and selling the bitcoin rival. Some accused the venue of insider trading with bitcoin cash trading higher hours before the service launched its new feature. Coinbase said it is currently investigating these claims, and would "not hesitate" to fire employees if it finds they violated its trading policy.
Meanwhile, litecoin's price fell after its creator Charlie Lee said he had sold and donated all of his holdings in the cryptocurrency. Lee said his sold stake was a "small percentage" of daily volume on the cryptocurrency exchange GDAX and that it "did not crash the market."
Ripple said Thursday that its digital token was now available on more than 50 exchanges around the world.
One cryptocurrency expert pointed to talk of XRP being listed on Coinbase as a potential reason for the surge in its price.
"There are rumors on social media that XRP will be the next coin to be listed on Coinbase," Charles Hayter, chief executive of virtual currency comparison site Crypto Compare, told CNBC in an email.
"Litecoin and bitcoin cash experienced large volumes and price pumps on the same announcements and investors are looking to pick the next one."
XRP was created by Ripple, a blockchain firm, as a means of making international payments. The virtual coin is used to exchange high-value transactions from one fiat currency to another directly, and removes the need for fees normally associated with such transactions. The firm has said XRP transactions can be settled in four seconds.
As a company, Ripple is backed by a number of big international banks and other financial institutions. Financial firms use its decentralized ledger platform, RippleNet, to make fast, cross-border payments.
In November, Ripple teamed up with American Express and Santander on a blockchain pilot to speed up cross-border payments between the U.K. and U.S. In a phone interview at the time, Marcus Treacher, Ripple's global head of strategic accounts, told CNBC its virtual currency would "come into play later" in blockchain pilots with its financial partners.