Ripple Lost 70 Percent Peak Value in One Month – Here is why?

Ripple’s XRP the world’s third-largest cryptocurrency, has made significant gains in the last couple of days, and the currency is trading above $1 for the first time in the last two weeks. Prior to that, it had a bit of a nosedive, like all other cryptocurrencies, losing 70 percent of its peak value.
In early January, XRP was trading at $3.32 per token, with a peak market value of $147 billion. As a result, it overtook Ethereum as the second-largest digital currency. However, the currency, primarily made for international payment transfers, lost over $120 billion of its market cap in less than 30 days.
As we covered in a previous post, it’s not just Ripple, other digital assets like Bitcoin Cash and Ethereum also tumbled, losing their between 11 to 50 percent of their values. As a result of this, the overall market cap for virtual currencies fell by over $250 billion.
This is probably the reason why the Ripple’s CEO, Brad Garlinghouse has said that he does not think all cryptocurrencies will survive longterm. He has warned that just like Bitcoin has lost 60 percent of its peak value, coming down from $15,000 to $7,000, other currencies will follow suite.
What’s Adding Fuel to the Fire?
While the downturn has a lot to do with the market consolidation and correction, this trend in the cryptocurrency market is driven by regulatory fears and changing market dynamics. With the start of New Year, a number of countries have introduced new rules for using cryptocurrencies. China and South Korea, in particular, have introduced a number of strict measures aimed at regulating the market.
The Chinese government has blocked access to all crypto-related websites, exchanges, and portals to stop any crypto-trade originating from its locality. Earlier, the government had banned crypto-trading within the country, leading people with no option but use VPN to invest in the overseas market. However, that too is banned now.
South Korea, on the other hand, has banned anonymous trading in a bid to crack down on criminal activities and money-laundering. Meanwhile, regulatory bodies in other Asian countries like India and Pakistan have considered putting a ban on cryptocurrencies to avoid speculative trading and ill advised investments.
India’s finance minister recently stated that their government "does not consider cryptocurrencies legal tender and will take all measures to eliminate use of these crypto assets in financing illegitimate activities or as part of the payment system."
To make things worse for an already volatile market, leading banks in the United States and the United Kingdom decided to ban crypto-trading via credit cards. The decision came after the leading social network, Facebook, announced it would ban all ads for bitcoin, cryptocurrencies, and ICOs.
These developments combined spread a shockwave across the market giving fuel to the fears that cryptocurrencies may not be able to materialize their dream and end up adding more to the investors’ debt. As a result, all leading cryptocurrencies lost their peak value, bringing the market size down to under $500 billion.
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