THE Ripple price plunged today leaving XRP billions of dollars less valuable than this time yesterday. But why is Ripple going down?
Ripple opened at $2.02 today (January 14) but has since slipped to less than $1.90.
The digital currency briefly claimed second place in the crypto charts earlier this week, boasting a market capitalisation of more than £90billion ($123billion).
But a difficult few days has seen Ripple’s market cap plummet to less than £53.2billion ($73billion). Ethereum has now overtaken as the second biggest cryptocurrency, pushing XRP back to third.
The CoinMarketCap currency tracker below shows the latest XRP price in real time.
Why is Ripple going down?
Ripple’s most recent dip could be down to confusion over whether the South Korean government plans to ban the trading of cryptocurrencies.
On Thursday, Justice Minister Park Sang-ki sent shockwaves through the market when he announced: “There are great concerns regarding virtual currencies and the justice ministry is basically preparing a bill to ban cryptocurrency trading through exchanges.”
The Korean government has since distanced itself from the comments, saying: “All government ministries agree on the need for a government response to an overheating in cryptocurrency speculation and for a degree of regulation.
“Every crypto is priced at a 30 percent premium in South Korea” – Greg Dwyer, of BitMex
Ripple executives blamed the sudden drop on cryptocurrency tracker CoinMarketCap’s decision to remove data from South Korean exchanges from its calculations.
XRP is widely traded at a premium in South Korea so the market plunged about 30 percent as a result.
Greg Dwyer, head of business development at cryptocurrency derivatives exchange BitMex, explained: “Every crypto is priced at a 30 percent premium in South Korea.
In the wake of the crash, Ripple chief cryptographer David Scwartz bemoaned the decision.
He tweeted at the time: “CoinMarketCap’s decision to exclude Korean prices from the displayed XRP price made the price appear to drop, likely triggering some panic selling.
“Look closely at the data and don’t be mislead.”
Ripple continued to slide until Thursday when the company announced a new partnership with MoneyGram, who want to use XRP send money abroad quickly and cheaply.
The digital currency looked to have stabilised at just over $2, until today when it fell to a low of $1.82.
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