Ripple price: Why is Ripple crashing on the markets? XRP down 50% on record high

Ripple’s signature token, XRP, has fallen 55 per cent from its record high of £2.84 ($3.84) on Thursday to £1.28 ($1.73) at 11am GMT today, according to CoinMarketCap.

XRP opened at £2.48 ($3.36) on Monday but was dealt a crippling that day when its market cap and price were sent on a downward trajectory.

The new crypto contender had second place in the charts with a staggering market capitalisation of more than £90billion ($123billion) at 4.30am GMT on Monday.

But the Ripple market cap had hit a January low of more than £48billion ($65billion) by 8.34am GMT. Ethereum has overtaken as the second biggest cryptocurrency.

CoinMarketCap's exclusion of data from South Korean exchanges, where virtual currencies trade at a wide premium, sparked confusion and a broad selloff.

"Every crypto is priced at a 30 percent premium in South Korea," said Greg Dwyer, head of business development at cryptocurrency derivatives exchange BitMex.

"By removing that, it looks like the market cap fell by 30 percent and so people rushed to sell because they're not sure what's happening.”

Why are Ripple’s prices crashing?
The sudden collapse in Ripple prices came as a surprise to investors who jumped the crypto bandwagon after XRP skyrocketed an incredible 35,000 percent in 2017.

Unlike its main competitor bitcoin, Ripple has the backing and support of financial institutions like the Bank of America and Santander, who have adopted the money transfer system.

But Erik Vorhees, CEO of cryptocurrency exchange ShapeShift, argued that this drove the cryptocurrency into a speculative bubble of its own making.

The finance expert accused Ripple of boosting its allure on the markets by exploiting the backing it has received from big banks.