The past few days have been pretty torrid ones for investors all over the crypto currency markets as practically all the gains for December have been erased in one fell swoop. Bitcoin dropped to well below the $13,000 mark and is now trading at anything between $12,200 and $12,600, seemingly stuck in a rut out of which there does not seem to be much movement. Its sister currency, Bitcoin Cash has also dropped steeply from highs of $3,500 to settle around the $2,200 mark – a very disappointing performance albeit still above its price level at the beginning of December.
The other cryptos also had mixed results but the majority went steeply down from their highs of mid-December. The chief loser in this respect was Litecoin, which at one point dropped to under the $200 mark – an almost 50% drop from its high of $350 registered on December 15th. Many investors who went in at the $300 mark have now seen their holdings plunge and this is undoubtedly worrying news for all those who were looking at considerable profits over the $400 mark. The Charlie Lee statement has had a terrible negative effect it seems.
Ethereum had a bit of a mixed week but it was slightly down overall. At one point, on December 29, it had risen to well over $750 but in the latter days it dropped to under $700 and is currently trading sideways to levels of around $680-695. Ethereum Classic also had a disappointing week trading at between $24 and $29 but the lower figure is definitely its staying point. Dash was also down to levels below the $1000 mark although the decline here was not that pronounced and levels of $1,100-1,300 could not be so far away. It appears that the Segway Hard Fork has been a negative one overall.
The only exception to all this negative news has been Ripple which broke all records throughout the week and is set to continue rising. At one point on December 30, the crypto currency had reached the $2.50 level, an almost 1000% gain on its levels of just a month ago – a pretty impressive achievement. This led to a number of sell orders all across the market which caused considerable consternation and at one point, the whole exchange was blocked with several orders stuck in the pipeline. Investors and analysts have also complained on the large spreads being put up by exchanges such as eToro where the spread can be as much as 10% in some cases. At press time, the price of Ripple had descended to around $2 – but that was still a record when compared to the $1-1.20 of just the beginning of the week. There is talk of it achieving a $5 figure by the end of February which could mean further spectacular gains for investors.
It is interesting to note that Ripple has now surpassed Ethereum as the second most valuable crypto currency in the market with a $100 billion market cap. Some analysts are querying this massive valuation since there have not been that many banks who are currently using the crypto currency on a regular basis. This could lead to a correction in the short to medium term according to Ryan Selkis of ConsenSys.
Earlier this week, Selkis noted that one source of a major bank working with Ripple disclosed the lack of transaction volumes on the Ripple blockchain network, and how the Ripple token XRP is currently not being used for all of the transactions.
Quoting a source operating in the financial industry, Selkis said: "I know of no banks that are using it, or would touch it in any way as it is controlled by a SV company and 20% of all XRP in existence were taken by the founders.’” .
The source added: “The product that Ripple are offering to banks is simply a point-to-point messaging tool with some smart cryptography underneath to ensure that transactions are atomic. The liquidity model used is the same as correspondent banking. Some banks will have deep pools of liquidity available to terminate payments. Ripple’s approach with XRP has been to get it listed on a bunch of exchanges and “infer’ but never explicitly say that banks are using it for settlement.”
Bitcoin’s price dip has been attributed to the rise of Ripple and Cardano amongst others although it still has a very healthy 37.9% of the crypto currency market at the moment. There appears to be bullish prospects for 2018 although the price is currently at almost 50% less than the all-time high achieved two weeks ago when the $20,000 mark was breached. Additionally it appears that the model wherein the price of Bitcoin rises while other crypto currencies decrease has been blown out of the window in the past days.