From the record high of $3.84 last week, Ripple’s XRP cryptocurrency has fallen by about 47% since opening on Monday, January 8th. It is shocking to see that Ripple had lost almost $40 billion within last 4 days.
Major reason behind this crash is CoinMarketCap’s decision to exclude data from South Korean markets. This has cause a chain of event and spark the “panic selling”.
As South Korean markets have a large effect on the crypto price and every crypto is priced at a 30 percent premium in South Korea, on removing this factor, the market cap fell by 30 percent and so people rushed to sell because they're not sure what's happening.
Another layer of shock came after a report said that South Korean leaders were preparing a bill to ban cryptocurrency trading. After this Bitcoin initially slumped more than 10%, Ethereum go down 5% while Ripple's XRP, the third-largest, go down by 13%.This event has caused to fall all the cryptocurrencies by 18%.
The reason behind this big drop is South Korea has been a favorite place for other cryptocurrencies also, and other tokens have traded at significant premiums on its exchanges because of tight controls on capital in the country. For example bitcoin has traded at a more than 40% premium on South Korean exchanges relative to those in the US.
South Korean Government’s action to crack down the cryptocurrency have two different impacts, at the one hand this caused peoples to lose confidence in the digital currency market, but by other side can cause a really crack due Korean people can start to send their crypto to other countries....
Ripple’s centralized structure is also the reason that caused this currency to fall more than any other cryptocurrency in the Market.Unlike most cryptocurrencies, who are based on blockchain’s decentralized structure, Ripple is highly centralized, which means that the company can controls how much supply of XRP leaks out. It is the cryptocurrency that break the rules as transactions are processed in a centralized fashion and no new XRP can be “mined” by investors, as is the case with Bitcoin.
Initially the concept Ripple has been favoured by the business community and over 100 financial institutions were agreed to use the Ripple platform. The breakpoint come when New York times pointed out that it is not necessary that bank will only use the XRP tokens for all the transactions, but by my side ripple seems that is the best for the instant bank wire........
We have also to say that seems that coinbase declared that in the mean time Ripple will not be listed, instead of the “voices” of the market.
So it can be said that there are multiple factors which have contributed behind Ripple’s sharp fall, but are all of a “provvisory panic”, all will come at the correct pump in few days.
In the End, I think that korean market will never ban the crypto exchange due it is radicated and can create huge trasfer of Korean people founds to other countries.
my suggestion is also to Buy now, due ripple is ready to pump do the moon!, his price market is almost 3.5 Dollars and will come back to it and probably many companies will start to use it in the near future...... I also want to say that I think that ripple in 2020 could reach the 1000 dollars (but this is only my analisys).