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HomeFinanceCity & BusinessRipple price: XRP DOWN 50% on record high - Why is Ripple crashing right now?
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Ripple price: XRP DOWN 50% on record high - Why is Ripple crashing right now?
RIPPLE prices plummeted a staggering 50 percent on their January high in less than a week, putting a stop to the XRP rally. But why have Ripple’s prices fallen so dramatically?
By SEBASTIAN KETTLEY
PUBLISHED: 17:14, Wed, Jan 10, 2018 | UPDATED: 17:22, Wed, Jan 10, 2018
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CNBC reporter: Cryptocurrency Ripple falls 30% in one day
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Panic overtook investors on Monday when Ripple’s £2.38 ($3.22) price tag rapidly plunged just after 4am to a low of £1.58 ($2.14) just 11 hours later, according to CoinMarketCap.
Ripple’s token, XRP, continued on the downward trajectory through Monday to hit a January low of £1.26 ($1.70) at 8.34am on Wednesday – 55 percent down on its January 4 high of £2.84 ($3.84).
Investors have suggested that CoinMarketCap’s exclusion of marked up data from South Korean crypto exchanges triggered a market-wide sell off among investors.
David Schwartz, chief cryptographer at Ripple, said on Twitter: “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.”
He later added: “Prices definitely started falling after CMC made the change. My guess is that the appearance of a sudden drop triggered panic selling and profit taking. But that's a guess.”
Ripple’s market capitalisation also took a massive hit from the landslide drop, losing more than £51billion ($70billion) between January 4 and Wednesday at 4.12pm GMT.
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For a brief moment at the start of the month, Ripple creator Chris Larsen found himself among the top five richest people in America.
Edging out ahead of Google founders Larry Page and Sergey Brin, Mr Larsen’s crypto fortune of 5.19 billion XRP tokens was worth around £44billion ($59.9billion) on January 4, just before the token plunged.
Greg Dwyer, head of business development at BitMex, suggested that Ripple prices took an initial 30 percent hit on Monday after CoinMarketCap stopped tracking inflated South Korean prices.
He said: "Every crypto is priced at a 30 percent premium in South Korea.
Ripple price chart on CoinMarketCapCOINMARKETCAP
Ripple prices: XRP took a hit after CoinMarketCap excluded South Korean exchanges from its tracker
"By removing that, it looks like the market cap fell by 30 percent and so people rushed to sell because they're not sure what's happening."
The price drop may have sparked brief panic on the market with investors pulling back and selling off their XRP tokens, further fuelling the plunge.
CoinMarketCap's decision to exclude Korean prices from the displayed XRP price made the price appear to drop
David Schwartz, Ripple Chief cryptographer
CoinMarketCap defended its decision on Twitter, arguing that the stark differences in prices between Korean markets and the rest of the world were unfair to customers.
The company said on Twitter: “We excluded some Korean exchanges in price calculations due to the extreme divergence in prices from the rest of the world and limited arbitrage opportunity.”
“We are working on better tools to provide users with the averages that are most relevant to them.”
Ripple (XRP)
1.97 USD (-12.45%)
0.00013664 BTC
RANK
3 MARKET CAP
$76.45 B USD VOLUME (24H)
$5.42 B USD
Powered by CoinMarketCap
One of the Korean exchanges dropped by CoinMarketCap was Bithumb were Ripple’s price at 4.37pm GMT was £2.04 ($ 2.76) – compared to its £1.50 ($2.02) price on US-based Bitfinex, at the same time.
Similarly, South Korean exchange Coinone was trading Ripple at a higher price of £2.07 ($2.80) at 4.42pm GMT.
Ripple itself attributed the price drop to CoinMarketCap’s decision, saying in a statement on Twitter: “For those asking us about the recent price fluctuation, 
“This change applies to all of their listed digital assets, not just $XRP.”
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Other analysts have however suggested that Ripple’s patchy performance was part of the inherent volatility of cryptocurrencies.
Digital asset harder Marius Rupsys argued that cryptocurrencies like Ripple tend to “move in circles”.
He said: “Ripple tends to increase in price to very high levels and then just go down for extended period of time.”
Iqbal Ghandam, UK managing director at eToro, agreed that Ripple prices were simply correcting themselves after their sharp spike at the end of 217. The finance expert underlined that Ripple’s decline is "all part of the general correction”.
Mr Rupsys said: "Projects that got high valuations, like Ripple (10x in a month) can't sustain this growth as it is not driven by fundamentals, but rather speculation.”
