2018-11-21 16:22 |
In the last few days, ethereum has lost some of its value, causing it to slide down the ranks to and losing its highly coveted second position as the most valuable crypto in the world.
This 2nd position has been taken over by Ripple, which shot up by 8 percent even with an initial fall in value of 9.5 percent. It is important to note that Ripple’s gains happened when other cryptos including bitcoin have been struggling.
Ripple’s rally on Saturday helped it grow its market cap to $19.1 billion as against ethereum’s $15.92 billion, thus making it the next best valuable cryptocurrency.
Coinbase Custodial Platform And RippleCoinbase has been working on a custodian solution aimed at attracting institutional investors. In August, Sam McIngvale, one of Coinbase’s product leads, stated that the exchange was actively looking to add the top cryptocurrencies and ERC tokens to this solution, thus making it available for institutional investors when they do come in.
He wrote that,
“Coinbase Custody is exploring the addition of many existing and forthcoming crypto assets for storage only and will be working to add them as quickly and safely as possible. At this time, we have not yet considered these assets for trading. We are making this announcement internally at Coinbase and to the public at the same time to remain transparent with our customers about support for future assets,”
So as part of its efforts, Coinbase Custody added Ripple to its custodial platform, thus making it one of the cryptocurrencies that institutional investors can invest in, when they come on board. Even better, they can buy it here and leave it with Coinbase, which will act as a trusted custodian for those cryptos.
The SEC And Possible DelayThis is coming in the wake of the SEC’s crackdown on fraudulent and scam initial coin offerings (ICO) as well as further regulating those projects that should be categorized as securities. While bitcoin and ethereum recently passed their scrutiny and are no categorized as non-security, Ripple hasn’t been cleared.
So, while Coinbase and Gemini exchange are really interested in listing Ripple in their custodian service, they cannot do that right now, because of how long it will take the SEC to do so. Right now, the exchanges are waiting for clearance in the form of a complete guideline from the SEC to integrate XRP.
Integration Bodes Well For The XRPWhile the integration will take a while, the mere willingness of custodial services to include Ripple in its list of cryptos available to institutional investors, is a very good indication that the cryptocurrency is well regarded. Even more, its appeal to institutional investors shows that even the big money organizations believe in its capabilities and future potential.
Ethereum Under PressureWhile Ripple has been enjoying the last few days, ethereum on the other hand, hasn’t fared so well. With its downward slide in value and market capitalization, the cryptocurrency has been under pressure.
This is not surprising seeing as the SEC crackdown is likely to affect a ton of ERC 20 tokens created on its platform. In fact the bulk of ICOs in 2017 and 2018 have been held on the platform. The increased scrutiny of the platform by the regulatory bodies might not be good for the cryptocurrency.
According to Larry Cermak, Diar’s former chief editor,
“there is a big misconception that ICO companies have liquidated most of their ETH holdings… On average, all of these projects have moved or liquidated 62% of the amount that they initially raised. In other words, they are still holding 38% of the initially raised amounts.”
Most ICO founders have had to often sell their ether on the exchanges. This huge sell volume has somewhat affected ether’s value in the marketplace and continues to do so even now.
ConclusionThe current state of the market is far less than ideal, and is likely to remain so for a while. This is clearly seen from the lack of a clear bottom as well as the lower trading volume.
As long as these conditions persist, we’re most likely, going to continue to see a downtrend in the total market capitalization. And if the market does recover, it might be a while before the market hits the $300 billion market cap again.
But again, all these are mere speculations based on the current market trends. The crypto industry has always been full of surprises. Most people didn’t foresee the nearly $800 billion market cap happening, but it did at the beginning of this year.
So, market watchers, investors, and traders will have to keep their fingers crossed.
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