Why is Everybody Selling Ripple and Ethereum?

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.

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