For the past week, while every asset in the cryptocurrency market has steadily declined, Ripple’s XRP token has somehow managed to keep its head above water – at one point even having zero losses over the week.
However, this week’s freshly tumbling market has proved too much even for the king of bank-backed cryptocurrencies. After impressively strong horizontal trading throughout yesterday, at about 8 am UTC today, XRP began a sudden and drastic plunge. It has now lost almost 20 percent in value, dropping from a high of $0.50 to $0.40 (edit: it has since recovered to $0.44).
As U.S. markets were closing yesterday when Bitcoin and most other cryptocurrencies were down around 20 percent, some analysts predicted XRP might eventually overtake Bitcoin to be the number one crypto by market cap. At one point, XRP had a $20 billion market cap, one quarter to that of Bitcoins $80 billion. Now, however, that gap has widened as XRP has dropped to $16 billion with Bitcoin holding on slightly at just under $75 billion.
The ongoing Bitcoin Cash hash war that is tearing holes in Bitcoins value has managed to leave XRP relatively unscathed until now. This is no doubt due to value being drawn from Bitcoin to fund the war, whereas XRP funds are remaining intact. Unfortunately, the knock-on effect of a market that has lost over $70 billion in value over the past week was no doubt going to bleed out into everything eventually.
XRP’s value relies heavily on its association with Ripple, a company who’s integrity relies heavily on traditional banking institutions opting to adopt its cross-border payment technology. In light of the cryptocurrency market now revealing itself to be nothing more than a weakly propped-up speculative monster that can be taken down by two opposing factions in a technical disagreement, are the banks really going to hold their support?