Valuation of Cryptocurrencies
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Introduction to Major Cryptocurrencies
Cryptocurrencies are digital assets that may be used as a store of value, a utility token in a specific business model, or a means of exchange between individuals and corporations. The proper valuation or classification of cryptocurrencies is currently one of the most fascinating and problematic topics in the financial world.
Bitcoin(BTC)
From any perspective, Bitcoin is the largest cryptocurrency in the world. Bitcoin is worth over 40% of the total market capitalization of all cryptocurrencies and is very much the poster child of the industry. There is a circulating supply of about 16 million BTC, and a total supply of 21 million BTC.
The Bitcoin network came into existence on January 3, 2009 after the whitepaper was released in late 2008. The release of Bitcoin was just at the tail end of the global financial crisis, the worst global depression since the great depression after the first world war.
Perhaps more than anything else about Bitcoin, the image that comes to mind from the media coverage and events of the past few years, is its meteoric price and unprecedented volatility. BTC price rose over 1,400% in 2017!”
“Introduction to Major Cryptocurrencies
Ethereum(ETH)
Ethereum has the second largest market capitalization. Ethereum was created by Vitalik Buterin, it began trading in 2015, and has grown phenomenally in price ever since. The Ethereum blockchain allows for tokens to host their own designs on top of its underlying technology.
The cryptocurrency in the network is referred to as Ether (ETH) and its design employs a proof of work component as well as a mining for validation aspect. Ethereum was proposed by Vitalik in 2013, after which its ICO followed in 2014. ETH has a very impressive market capitalization of over $80billion USD and a circulating supply of 97 million tokens.
In 2016 there was a chain split which produced a separate version of Ethereum/ETH, which is known as Ethereum Classic, ETC. This was due to the collapse of the DAO (Decentralized Autonomous Organization) project, a project which is primarily remembered for holding the record for the largest ICO in history.
There are thousands of cryptocurrencies presently available to be traded on the market. As of June, 10, 2018, the total capitalization for the entire cryptocurrency market is $294,805,030,639USD.
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“Introduction to Major Cryptocurrencies
Ripple (XRP)
Ripple started with the aim of becoming the world’s best blockchain solution for global payments. Ripple has become the third largest cryptocurrency with a market capitalization over $40billion USD (as of February 21, 2018) and a price over $1 USD.
Ripple has a maximum supply of 100 billion XRP, of which about 99 billion are in total supply, and 39 billion are in circulating supply. Ripple is primarily used in interbank settlements for the transfer of assets. The token used for the transfer is destroyed immediately following the transaction, consequently it does not follow the proof of work design where miners are rewarded for validation.
Ripple connects banks and financial service providers such as digital asset exchanges and inter-currency payment providers, via the Ripple network.
XRP trades upon many exchanges from Bitfinex, Upbit, Bittrex, Binance, to Poloniex.
Go to the website, www.ripple.com. That is the best place to familiarize yourself with the specifics of the Ripple project, and learn all about the expectations of the Ripple team as well.
When we examine the cryptocurrency market, we see common characteristics and factors, not unlike what we see in the equity markets, and the markets for options or derivatives as well.”
“Market Dynamics
We have already defined cryptocurrencies most simply as digital assets. And as you are well-aware, the cryptocurrency industry is still in its nascent stages. There is a tremendous amount of volatility across all cryptocurrencies as a result of the immaturity of this industry and this market too.
One BTC was initially valued at $0.00076 USD. Then BTC skyrocketed to an all-time high (ATH) of approximately $19,500 in early 2018, before coming back down again to a 5-figure valuation.
What are the factors driving these wild fluctuations in the value of Bitcoin?
To understand the current situation, we have to cover a little bit of background first. The definition of a currency includes the functionality or ability to be used as a means of exchange. The currency must have a value. In the foreign exchange market, different currencies are valued against each other i.e. GBP/USD, USD/JPY, AUD/USD, etc. For instance, assume that GBP is valued against the USD at $1.16/GBP. That means anyone who is in need of USD and wants to buy them with GBP, will need perform the transaction at $1.16 GDP per USD. In foreign exchange there are two types of markets of which you should be aware, light and dark markets.
‘Light’ markets are heavily regulated and typically part of government sanctioned and controlled exchanges. ‘Dark Markets’ are typically over the counter for private trading between two or more parties.
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“Market Dynamics
§2
The cryptocurrency and blockchain industry also have their own ‘light’ and ‘dark’ markets. The main difference between traditional forex markets and cryptocurrency markets is that all crypto exchanges can be considered ‘light’ markets. Although they are not heavily regulated, they make crucial information publicly available to all investors. This is in accord with the lack of any central authority and the decentralized nature of cryptocurrencies.
Exchanges are platforms that create a market in which buyers and sellers come together to trade one or more assets. Some of the more popular cryptocurrency exchanges include Coinbase, Kraken, Bittrex, Binance, Poloniex and Coinexchange. The price of cryptocurrency changes every second exactly like stocks and bonds on the NYSE. The price is always determined by the highest bidder and a willing seller at that particular point in time. A trade can only occur if there are both a buyer and a seller who agree on price and volume at the same point in time. Observers and other investors can see the movement in price and volume as the transaction is taking place on the exchange.
But there are situations where people sell their cryptocurrency assets at prices which are different from what is being quoted or shown on the exchanges. For instance, there were reports that during the Zimbabwean inflation and monetary crisis, citizens were buying Bitcoin at prices higher than the market rates quoted on the exchanges. This is certainly something to keep in mind when you examine the chart and dynamics of a cryptocurrency market. “
“Definition of Class
As we continue studying, there are a few similarities between cryptocurrencies and fiat currencies we need to discuss in more detail. We already know that in the fiat system currencies are valued one against the other and traded on the foreign exchange market. Cryptocurrencies are traded in the cryptocurrency market and priced somewhat similarly one against another, a typical example is BTC/ETH which indicates the rate at which you buy or trade one currency for the other.
There has been intense debate in the financial and legal worlds about whether Bitcoin should be classified as a Monetary Asset, or as a so-called Utility Token. Some observers say BTC is in fact a store of value, more like gold than like the dollar. Some people prefer to classify BTC as a digital asset, like e-gold. And some people still insist BTC is a security, just like shares of Apple stock.
So, we have three broad schools of thought about what Bitcoin might be. The most popular definition by financial experts and regulators is Digital Asset. The second is Security. Third is Commodity. The classification matters a lot because different asset classes perform differently, and exhibit different qualities.
If something is classified as a security, for example, it entitles the owner to a future share of the profit or loss from that company.
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“Key Influences
The cryptocurrency market moves as a result of business and financial news just like the traditional markets do. There have been several noteworthy instances of cryptocurrencies moving in reaction to relevant news articles. We will examine those situations in more detail in the next section.
First, there are common topics and key influences which generally affect the valuation of cryptocurrencies. These various factors can be broadly categorized into Time, Initial Project Valuation, Exchange Listings, Project Developments, Project Characteristics, Cryptocurrency Team Members, Community Acceptance, Use Cases, and Government or regulatory sentiment.
There is a common saying among traders from traditional markets:
“Buy the rumor, sell the news”
The lesson to be taken from this saying is: Yes, news surrounding any of the aforementioned factors can affect the price of cryptocurrency assets, but it is not that simple. By the time most people see the news in front of their eyes, it is already too late. They would have been better off buying when the news was just a rumor. By the time the news is in the headlines, the smart money that was in early is happily selling to the less-well informed investors buying in later.
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“Influence of News & Gossip upon the Market: Key Influences
Time
Time influences many of a coin’s valuation characteristics in the market. Larger coins like BTC and ETH might trade more like a security or commodity does. ICO tokens might trade similarly to early-stage securities. Time is the purifier. As time passes and more and more trades take place, the true value of the token or cryptocurrency is revealed. Unsupported or overvalued tokens are sold off, while undervalued tokens are bought and their price will rise.
This is the nature and function of the free market. Prices do not move based solely on fundamentals. Market sentiment and investor opinion are indispensable factors to consider in trying to understand or predict market movements.
Project Valuation
Every cryptocurrency project will prepare and release a whitepaper to commence business operations. The whitepaper includes the underlying business model, the strategy, and the financial fundamentals which all underpin the valuation of the project.
For example, a review of Cardano (ADA) suggests that the coin is the best placed competitor to Ethereum. Its creator is one of the top members of Ethereum’s development team; and ADA also allows smart contracts to work upon its underlying technology, like Ethereum does. In the past, the ADA price has moved in a positively correlated manner to that of ETH due to their similar underlying technical and strategic positions.
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“Influence of News & Gossip upon the Market: Key Influences #2
Exchange Listings
Since exchanges are where most cryptocurrency trading takes place, the fact of listing or delisting of coins on cryptocurrency exchanges will greatly influence the price.
Cryptocurrency projects have to follow a specific series of procedures to be listed on each particular exchange. Cryptocurrency investors believe that as a coin gets listed on more exchanges, that gives the project more exposure, and helps establish the authenticity of the project. The bigger the exchange is, the greater the influence listing or delisting will have on the price.
Project Developments
As a token or cryptocurrency grows in size in its specific industry or sector, its roadmap and developmental plans become major factors that can influence its price. Events such as a Hard Fork or SEGWIT, for example, are major developments to watch out for.
Every cryptocurrency project has a PR function to disseminate news to investors and to the public.
Coinmarketcap is a good channel for receiving such information. It is arranged in such a way that when you click on a cryptocurrency, it brings up the latest news, cryptotalk.org forum posts, and news reports. CoinMarketCalendar also helps you to catch up with cryptocurrency related events.
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“Influence of News & Gossip upon the Market: Key Influences #3
Project Characteristics
One of the most important qualities of money that helps to support its value in the first place, is that it should be scarce, the supply limited. Likewise, the total supply of a token defines its scarcity, affects it value, and greatly influences the price of that token.
There are some projects that have billions of coins in circulation. Coins like Digibtye (DGB) have always been within the range of 1–1000 sats and never higher.
Community Acceptance
A large part of all cryptocurrency valuation is predicated on market sentiment and the belief by investors that the tokens store some certain degree of value. A cryptocurrency project needs to use a great deal of effort and time to ensure they are well-received and remain in good standing in the crypto investor community.
Investors will decide the fate and valuation of a token in the market. You will recall that a digital asset, cryptocurrency, or token is different from a traditional equity, for example a share of Apple stock, because it has no underlying cash flow or collateral upon which you can calculate a verifiable valuation. The market value of a crypto asset is entirely dependent upon investors believing that somebody will buy their tokens for more than they are worth at the present moment.
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“Influence of News & Gossip upon the Market: Key Influences #4
Cryptocurrency Team Members
People on the team come with their own personality, qualifications and history. Ideally, they bring good reputations, and help engender respect for the project. The participation of high-profile and well-regarded individuals can greatly influence the price. Investors will feel much more comfortable and confident about a project if they know someone on the team has a good reputation and a successful track-record in business.
Roger Ver is an outstanding example. He was an early adopter of Bitcoin, and a central figure in the hardfork of bitcoin’s blockchain that resulted in bitcoin cash. We can even say that bitcoin cash was in fact largely promoted and initially gained respect due to the participation and support of key individuals like Roger Ver.
John McAfee of McAfee Antivirus is another individual with power to influence the market. Towards the end of 2017 he started a campaign promoting certain cryptocurrencies. He was able to muster so much hype in the market that Verge went as high as 1200 satoshi on Bittrex. He did the same for several other coins before some people started accusing him of trying to profiteer off legitimate projects by dumping the coins upon exchange listing.
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“Influence of News & Gossip upon the Market: Key Influences #5
Governmental Position
Of course, the entire crypto ecosystem and all of the cryptocurrencies contained within it, are all a relatively new innovation. Legal authorities in most countries are still trying to figure out this market so they can draft comprehensive legislation that will regulate but not destroy or un-necessarily impede technical innovation and progress. When the government of China for example clamped down on cryptocurrencies out of a concern for financial stability and social unrest, the price of all cryptocurrencies fell mostly because people were worried that Chinese investors and miners would withdraw from the market.
Cryptocurrencies may be unregulated and not controlled by a central authority; but the individuals who invest and participate are subject to all kinds of laws and regulations, and affected, directly and indirectly, by all kinds of central authority and control as well. Investors need to keep a close eye on news relating to cryptocurrencies and avoid being caught by any sudden or drastic changes to investor sentiment or access to the market.
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“Bitcoin’s Detailed Price History
Cryptocurrencies first gained the attention of a global audience with the innovation and release of Bitcoin. The study of cryptocurrencies can be dated back to the 1990s when a group of cypherpunks came up with specific ideas, principles, and pieces of technology that are mirrored in both theory and reality in many cryptocurrencies today.
If you want to understand what bitcoin is, it is helpful to understand where bitcoin came from. It all started with people like Adam Back who created HASHCASH, Nick Szabo who started Bit Gold, David Chaum who started Digicash, Wei Dai who created B money, and Hal Finney who created RPOW. Each of these projects brought encryption more and more into the limelight. Then, not so long later, Bitcoin was able to evolve on that encryption and become the face of the cryptocurrency industry that it is today.
After its release in January 2009, Bitcoin started with a price of $0.00076, and the first bitcoin transaction was recorded between Satoshi Nakomoto and HaI Finney. On February 6, 2010, the first Bitcoin exchange was opened, called DWDOLLAR, with an opening price of $0.001.
A very popular story appeared on May 22, 2010, about a fellow who used 10,000BTC, worth $25 at the time, to buy 2 pizzas, also worth about $25 at the time, for the first actual transaction with BTC. The price of BTC at the time was $0.0025. Fast forward seven months later and see Bitcoin ended the year 32x higher, with a closing price of $0.08.
Needless to say; Would you prefer the pizza or the bitcoin today?
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“Bitcoin’s Detailed Price History §2
The Silk Road was founded by Ross Ulbricht and opened on January 1, 2011 with an opening exchange price of $0.32 for one Bitcoin. On March 6, 2011, Jeb McCalleb sold Mt.Gox to Mark Karpeles, when Bitcoin was valued at $0.88. By April 23, there was BTC to Euros parity wherein 1 BTC was valued equally with 1 EUR.
After Erik Voorhees launched SATOSHIDICE the next day on April 24, 1 BTC was valued at $1.63USD. By June 2011, the price of Bitcoin had skyrocketed to $10. When the Bitcoin foundation was formed on September 27, 2012, 1 BTC was valued at $12.31.
By February, 2013, 1 BTC was at $30.26 and it kept increasing for the next month on its way to $86.18 on March 28, 2013. Bitcoin market cap was at $1billion USD. Erik Voorhees sold SATOSHIDICE for $11,500,000.
The Winklevoss twins invested $1,500,000 into BitInstant when Bitcoin was at around $120. In August 2013, after a Texas Judge ruled that Bitcoin is a currency and Bloomberg included Bitcoin in its datasets with the stock ticker ‘BTC’, the price began to soar until it got to around $1200 in December 2013.
The infamous hack at Mt.Gox was a major blow to the community in 2014. But skip ahead a few years to December 2017 and Bitcoin reaches an all-time high of approximately $19,500.
One pattern that has emerged in BTC trading is a dramatic skew towards upward movements in price near the end of the calendar year. This is a major trend pattern for technical analysts in studying BTC price behavior.
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“Bitcoin’s Key Price Movements
Now let’s consider specific factors affecting BTC valuation and the reasons behind the volatility and volume of trading.
In technical analysis, these first few years of BTC trading are called the ‘excitement’ stage. Bitcoin and the blockchain are seen as such an amazing innovation and such a momentous financial and technological breakthrough that there is no ceiling in sight, the price can go up as high as it wants to go. To the believers, the potential of bitcoin and blockchain technology is almost unlimited.
However, there were several major issues and developments that depressed the price, as you can see in the chart above. There were money laundering charges against Charlie Shrem (the CEO and co-founder of BitInstant). There was controversy about Silk Road (an online marketplace where people were able to buy drugs and carry out unlawful transactions with Bitcoin as the means of exchange). And then the robbery which led to bankruptcy and court proceedings against Mt.Gox, the world’s largest Bitcoin exchange, handling around 70% of all BTC trading at the time, in 2014.
The explosive bull run of 2017, before the sharp reversal and decline in the first half of 2018 clearly demonstrates the unprecedented volatility of this asset class. Fortunes can be made and fortunes can be lost faster than you realize. People were paying almost $20,000 for one BTC at the end of 2017, and selling it for just one-third of that price in 2018.
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“Bitcoin’s Influence upon the Broader Market
Bitcoin is the largest cryptocurrency by market capitalization and the most actively traded cryptocurrency on the majority of exchanges. In fact, most exchanges value other cryptocurrencies and tokens in Satoshi.
Many technical analysts have noted that when Bitcoin is undergoing a bull run, there is a significant negative effect upon the broader market. This is the result of money being pumped into Bitcoin either from outside the system, or from the sales and reallocation of funds from other cryptocurrencies into BTC.
The other major cryptocurrencies, typically those within the top five to ten ranked by market capitalization, will rise when the price of Bitcoin rises. The opposite is also true. When the price of Bitcoin falls, so too does the price of these other major coins.
There are a few primary reasons to consider from a behavioral perspective. The vast majority of money, both retail and sophisticated, has been made in Bitcoin, Ethereum and Ripple. When these coins appreciate in price there is a significant wealth effect upon the industry. Investors in cryptocurrencies are just like anyone else. They suffer the same emotions, the same greed and the same fear, when their investments go up and down in price. They become exuberant. They become depressed.
The price of bitcoin is, for the moment at least, one of the single largest drivers of other cryptocurrencies price action. But it will not be like this forever. There are always new cryptocurrencies and ICO projects coming out. The market will continue to diversify and the proportion of BTC total market capitalization will continue to recede.
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“Bitcoin’s Notable Periods
As for now, we are going to focus on four especially notable periods in the history of bitcoin.
Crash of Mt.Gox Cryptocurrency Exchange
Mark Karpeles bought the Mt.Gox business in order to earn money from operating the exchange. He was not technically experienced, and he was not particularly interested in spending more money to ensure adequate security. Before the final grand robbery had occurred, there had already been three other occasions where Mt.Gox suffered from the same type of scheme, though on a smaller scale. When the final robbery occurred and suddenly thousands of peoples’ Bitcoins were no longer there, it caused an incredible sense of panic throughout the entire cryptocurrency community and blockchain ecosystem.
The price of bitcoin immediately plummeted from $1,200 to $120. It was like a bank default. It was unthinkable, but it was happening. Investor sentiment suffered a near death-blow. Headlines were in unanimous agreement: cryptocurrencies were not safe, they were not secure, and bitcoin was dangerous.
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“Bitcoin’s Notable Periods #2
Charlie Shrem’s Fraud
Charlie Shrem was vice president of the Bitcoin foundation, and CEO and co-founder of BitInstant. Mr. Shrem’s exchange was just supposed to provide a market for buyers and sellers to meet, but it seems he was also selling BTC to investors. A full investigation showed that he was the central figure behind various nefarious actions. He was in fact involved with illegal black-market activity on The Silk Road. When the Silk Road was subsequently closed by the FBI, and individuals were indicted and arrested, it further harmed the image of cryptocurrencies.
With the vice chairman of the supposedly reputable Bitcoin Foundation in prison, many stories began flying around about how the sole purpose of Bitcoin and cryptocurrencies was for the exchange of contraband. This kind of talk further hurt the value and image of cryptocurrencies and most certainly deterred a large number of potential investors from getting involved. This negative early image was one of the key factors holding back public acceptance and limiting price gains for BTC and other cryptocurrencies.
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“Bitcoin’s Notable Periods
SEGWIT Activation
This might seem a bit technical at first, but one particular development caused a major movement in valuation of BTC and all the other cryptocurrencies as well. Toward the end of 2017, there was debate from several quarters over the SEGWIT activation on the Bitcoin Blockchain.
SEGWIT is the short term for segregated witness. It is a procedure that affects the original blockchain and produces hard forks off the chain.
We have had several forks later, such as Bitcoin Cash, Bitcoin Gold etc. But, especially when the call for SEGWIT first came, the core developers were pessimistic about counter reactions because it was happening too fast and would disrupt the community. To this day it is still hotly debated and remains one of the most divisive issues within the community. A fork on the main chain can cause a significant drop in the valuation of an asset. Technical issues like this will continue to produce risk for investors, and further fuel volatility causing sharp movements both up and down.
The Silk Road
The Silk Road was founded and managed by Ross Ulbrict from 2011 to 2013. When the Silk Road opened to the world, it was an anonymous online marketplace, similar to eBay, but where illicit goods and services were bought and sold with cryptocurrencies.
Interesting Fact! One individual was eventually indicted by the FBI for being at the center of illicit trade of drugs, guns, assassination, anything and everything else on the Silk Road. Within such a short period, the Silk Road generated close to $1billion in sales. It was one of the biggest news topics in the world at the time.
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“Specific Price Study
By now we all know the general story of bitcoin from the beginning to the present day with the dramatic peak of the bull run in late 2017 when bitcoin was traded at just under $20,000. It is fair to say this unprecedented surge in value shocked the world. It was a seminal moment for a number of specific reasons already discussed. Now we want to look at the whole story, summarize the entire history of bitcoin investing. This is a story about an unimaginable bull run driven by a large inflow of money, unrelenting news interest, and FOMO investors suddenly willing to pay whatever price they needed to pay to own BTC.
A few months later, after the surge of interest from the general public had waned, the price started moving on a steady downward slope. The move down was not sudden, or severe, it was a gradual, but more or less steady decline in value. Retail investors and speculators lost interest and now just wanted to avoid further losses.
We will focus on one specific day that exemplifies how many traders and long term HODLer’s came to view the value of BTC.
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” Specific Price Study §2
On April 12, 2018, the price of Bitcoin suddenly surged upward by an unusual amount, even by Bitcoin standards, as a result of a tremendous wave of new money entering the market. But at first, many people were somewhat lost for an explanation as to what was behind this development. There was no particularly significant news, retail investors had already lost interest, and it seemed that Bitcoin would just continue to fall until it eventually found a technical support level.
But, as the day went on, Investors were slowly able to piece together what had occurred. Investors believe that at the beginning of the day there was a huge surge of institutional money looking to purchase bitcoin. Institutional money in this situation refers to traditional Hedge Funds, Investment Banks or perhaps some Venture Capital investors. These investment vehicles are often led by sophisticated individuals with exceptionally talented teams. To many in the crypto community, this was the moment cryptocurrencies gained acceptance by the traditional financial world. Big investors came in to the market with a very large sum of money to purchase BTC. This realization and the expectation of more institutional money helped buoy the price.
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“Ethereum’s Detailed History
Cryptocurrency has been through a number of iterations and challenges over time in its pursuit to change the world with nothing less than a complete financial revolution. Several cryptocurrencies have appeared with different purposes and different technology but still aiming to realize the initial aims of Bitcoin.
Ethereum is an open-source, blockchain computing network, which features smart contracts on its network. This allows developers to build decentralized applications, called dapps, based on the underlying Ethereum technology. The Ethereum project has proven to be one of the most sustainable projects in the entire cryptocurrency ecosystem.
Ethereum started with an ICO price of $0.311, and 50,000,000 tokens were sold during the ICO. On August 7, 2015, Ethereum began trading on the secondary markets with a price of $2.83 and went on to close at $2.77 for the day.
The price of ETH followed a consistent downtrend for the next 5 months before it started picking up again in January 2016, and reached a new ATH of $2.97 on February 8. The chart showed a range of $2 – $15 over the year. Then on March 12, 2017, ETH traded at $21.46. By May 20 it had reached over $100.
Ethereum has never fallen below that range since that time. In fact, ETH traded from $100 up to a mind-boggling ATH of $1,397 reached on January, 14, 2018.
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“Ethereum’s Notable Periods
Ether, as a cryptocurrency in its own right, has had a number of notable periods of price movement. Although we will not cover ETH in quite as much detail as BTC, we certainly do need to examine the price history of ETH up to now.
One of the more famous periods in recent time is known as ‘the ramp’. The second week of august in 2017, ETH surged to $300-$400 in the space of a few days. For the course of the next few months it struggled to break out of key technical barriers and ranges of support. Then, towards the end of November it suddenly burst into life with significantly more volume, mirroring the rise of BTC, and rising above $800, before retreating into a new trading range between $700 to $800.
Recently, on April 1, 2018, ETH hit its lowest daily closing price of $359.22.
(And today, it is even lower.)
Although recently, in the middle 2018, this relationship has become increasingly loose, ETH has historically maintained a strong and clear positive correlation with the price of BTC. But in the future, we might see BTC decline, and ETH might hold its value, or even appreciate significantly by comparison.
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“Ripple’s Detailed History
Ripple (XRP) is the last of our top three major cryptocurrencies. It was released in 2012, designed for making much faster interbank settlements.
XRP opened at $0.005874 on August 4, 2013, and eventually rose to an ATH of $3.36 on January 8, 2018. Due to the bearish market conditions troubling the market so far in 2018, XRP value fell significantly to $0.586198. And, today, August 14, 2018, with even more negativity in the market, XRP is trading at $0.265030 with a total market cap of $10,434,885,990.
Key Price Movements
This degree of volatility has caused a lot of controversy about Ripple because it resulted in such a dramatic loss of value for XRP. It simply did not seem fair to many observers. There were certain times when the price would climb incredibly quickly, before the coins were then dumped on subsequent buyers. Many critics voice negative opinions about Ripple. Some people go so far as to say they don’t like XRP because it is used as an interbank settlement system, and it has been hijacked by banks for their own personal gain.
Another problematic factor driving XRP price movements is that many members of the crypto community remain hesitant to embrace something that may not remain unregulated. In other words, Ripple seems to ignore one or more basic principles of cryptocurrency. The whole aspect of decentralization comes into question to the extent XRP is subject to some form of central control.
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