Why is Everybody Selling Ripple and Ethereum?
Markets

Why is Everybody Selling Ripple and Ethereum?

Why is Everybody Selling Ripple and Ethereum?

There is no confusion; cryptocurrency markets are diving. For investors who have already seen all of their 2017 gains eliminated, this may be something of a calamity. For people new to cryptocurrencies, this all might seem a little baffling.

The average beginner is aware of just a handful of cryptocurrencies. Bitcoin, Ethereum, and Ripple are the most well known (there are more than 1,000 others). Everybody knows that Bitcoin has had a rough go of it in 2018, though, in recent days there have been some gentle recoveries. But why are Ripple and Ethereum suffering so terribly?

We chalk it up to a few simple reasons:

1) The market is panicking

2) 2017 valuations were premature

3) Most people can’t easily invest in cryptocurrencies – yet

There are other reasons why Ethereum and Ripple are seeing price declines but these are three of the most significant. Let’s unpack them.

Crypto Markets Are Panicking

It’s not just big crypto coins like Ethereum and Ripple that are plummeting. Pretty much every cryptocurrency has been hemorrhaging value in recent days. Some say this is because cryptocurrency is a failed technology. In fact, recent months have seen major advancements in numerous projects, ETH and XRP included.

The market is freaking out because investors are afraid of losing money. They’re unsure if this crypto thing is legitimate. They’re putting their money into assets that seem safer and more comprehensible, like fiat. Despite this, Ethereum and Ripple are stronger than ever, with world-class developers expanding both technologies. In our opinion, this market tantrum won’t last forever.

2017 Valuations Were Premature

During the 2017 bull run, cryptocurrencies were priced as if they represented mature world-leading companies. In fact, most of these companies are startups. More development and user adoption is needed before coins can claim true, inherent value. Until then, sky-high prices are speculative and vulnerable to crashes like we’ve seen.

Most People Can’t Yet Easily Invest in Crypto

For most of its history, cryptocurrency has been sold to internet users who have some extra cash to risk on digital money. Your mom didn’t know how to buy Bitcoin. Institutional investors couldn’t invest meaningfully in the sector. This is all starting to change.

Major platforms like Coinbase and eToro are making crypto investment mainstream. As new money enters the space, prices will inevitably be increased. It will take some time for 1) market panics to subside and 2) blockchain technology to mature. But, when this happens, valuations will have a firmer foundation and people all around the world will have the means and motivation to invest for the first time.

Despite recent price catastrophes, Ethereum and Ripple are among the cryptocurrencies best able to wait out the storm. They have enough money to continue development, institutional adoption is on the rise, and new applications are attracting new users. Those who say that the market decline is the end for Ethereum and Ripple are too concerned about prices. What matters is technology. And, by this metric, Ethereum and Ripple are among the best blockchain projects in the world.

*Information in this article should not be taken as investment advice.

Leave a reply

0 Comments

There are no comments on this post.

Risk Warning: Investing in digital currencies, stocks, shares and other securities, commodities, currencies and other derivative investment products (e.g. contracts for difference (“CFDs”) is speculative and carries a high level of risk. Each investment is unique and involves unique risks.

CFDs and other derivatives are complex instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how an investment works and whether you can afford to take the high risk of losing your money.

Cryptocurrencies can fluctuate widely in prices and are, therefore, not appropriate for all investors. Trading cryptocurrencies is not supervised by any EU regulatory framework. Past performance does not guarantee future results. Any trading history presented is less than 5 years old unless otherwise stated and may not suffice as a basis for investment decisions. Your capital is at risk.

When trading in stocks your capital is at risk.

Past performance is not an indication of future results. Trading history presented is less than 5 years old unless otherwise stated and may not suffice as a basis for investment decisions. Prices may go down as well as up, prices can fluctuate widely, you may be exposed to currency exchange rate fluctuations and you may lose all of or more than the amount you invest. Investing is not suitable for everyone; ensure that you have fully understood the risks and legalities involved. If you are unsure, seek independent financial, legal, tax and/or accounting advice. This website does not provide investment, financial, legal, tax or accounting advice. Some links are affiliate links. For more information please read our full risk warning and disclaimer.