This post has been written by Andrew French ( Twitter @asiamtm) for Ripplenews.tech
We can look back to January 9, 2017 when XRP had a price of just $0.006 USD to a 2nd quarter high
on May 15, 2017 at $0.348, to an all time high on January 1, 2018 to $2.785
(source: https://www.worldcoinindex.com/coin/ripple) Then we look at today’s current price of
$1.706 and wonder just what is going on. Note, some exchanges were reporting even higher highs,
and is explained below.
First we need to understand that there is some difficulty in knowing what the actual price of XRP is.
This is because there are so many exchanges trading it across various pairs, each with their own
customer base. This “arbitrage” can cause some confusion, but at the end of the day, the price that
should matter to you is the price on the exchange you work with and at what your entry price(s)
are/were (as well as what your strategy is).
Cryptocurrency trading is relatively new and crypto in general is an emerging technology. This can
lend itself to having far too many “newbie” investors just looking to make a “quick buck”. There are
essentially two types of traders, which are day traders and long term investors. The day traders are
susceptible to FUD (Fear, Uncertainty, and Doubt) whereas the long term investors are more
interested in the fundamentals of a company and can ignore the “noise” in the market.
With XRP and other alt coins, the FUD is just rampant, mostly being driven by inaccurate or even
fake media reports. The latest example is how a news report said that South Korea is drafting a bill to ban cryptocurrency trading (source: https://www.reuters.com/article/uk-southkorea-bitcoin/south-korea-plans-to-ban-cryptocurrency-trading-rattles-market-idUSKBN1F002A) followed by another report that the government is NOT banning trading (source:https://www.forbes.com/sites/pamelaambler/2017/12/12/south-korea-is-not-banning-bitcoin-trade-financial-regulators-clarify/#293353291427) To the novice investor, this was enough to start a panic sell off and the price dropped to a low today of $1.560 (source: https://www.tradingview.com)
A previous FUD occurred when Coinmarketcap decided to remove the Korean exchange data feeds thereby showing an immediate and sudden price drop of XRP causing another panicked sell off (source: http://fortune.com/2018/01/08/coinmarketcap-removes-korean-exchange-prices/) Had Coinmarketcap been a bit more thoughtful about this process and issued statements of their intent first, then maybe it would have been better received (although perhaps there was some underlying strategy for their reasoning).
Prior to that, Coinbase made a statement that they had not yet decided which alt coins to list, and the FUD appeared about Coinbase saying they decided not to list XRP (source:https://www.bloomberg.com/news/articles/2018-01-04/ripple-slides-after-coinbase-says-not-adding-new-crypto-coins) There is a difference between saying “haven’t decided which coins to add” vs “we’re not listing XRP”.
Ripple has an incredible use case to solve cross border payments and to enable frictionless payment processes saving days of time and trillions of dollars (source: https://ripple.com/use-cases/) FUD in this arena claims that XRP is centralised and majority owned by Ripple. This is actually far from the case. As of May 2017 and over the course of 18 months, Ripple will decentralise by removing 1 Ripple node for every 2 verified independent nodes until such time that Ripple have less than 51% operational nodes (source: https://ripple.com/insights/how-we-are-further-decentralizing-the-ripple-consensus-ledger-rcl-to-bolster-robustness-for-enterprise-use/) Ripple only holds 6,253,951,232 XRP with 38,739,142,811 having been distributed, with the remaining 55,000,000,000
locked up in escrow via smart contracts (source: https://ripple.com/xrp/market-performance/)
So Ripple don’t hold all the tokens, cannot make more, and cannot dump 55 billion tokens on the market.
The fundamentals and use cases of Ripple and associated native token XRP will change the landscape of the financial industry if mass adoption can occur. Regulation by governments can only reinforce their vision as it stabilises their position in the industry. Pump and dump panic stricken traders will always exist, but the long term investor, confident in Ripple’s future will prevail.
Disclaimer: I personally own XRP digital assets and am a long term investor/holder in the product.