November was a rough month in the world of crypto. Despite a spirited bounce last week, we’ve seen $70 billion wiped out across the board since the start of November.
But some cryptocurrencies held up better than others in the last couple of weeks. Here are the numbers since November 14th:
XRP – down 30%
Bitcoin – down 37%
Ethereum – down 45%
Notice how XRP hung on much better than Ethereum and ultimately surpassed it in terms of market capitalization?
It’s not the first time Ripple’s XRP token has “flippened” ethereum, but this is now the longest it has ever stayed there.
Here are some possible reasons for the flippening:
1. Cryptocurrency Mining Concerns (Yeah, I’m Looking at you, Bitcoin Cash)
As we all know, Bitcoin Cash terrified the markets by splitting in two this month. Miners went to war, threatening to launch attacks on each other and hold the network hostage.
It showed a possible weakness in “mining” cryptocurrencies in that miners can exert a huge influence over the network.
It’s no coincidence that Proof-of-Work mining cryptocurrencies like ethereum, bitcoin, and bitcoin cash fell harder than others.
XRP, which uses a consensus protocol instead, held its value better during the crash, as did others with a consensus network like Stellar (XLM).
As market prices fall, traders look to put their money in projects with real-world use. Ripple has been on a headline-grabbing spree this year, shouting about their high-profile partnerships with banks like Santander and American Express.
In reality, only a small handful of partners are actually using XRP, but Ripple has successfully given the impression that XRP has real-world utility which may have convinced people to keep their money in the token.
3. All Quiet on Ethereum
While Ripple is shouting from the rooftops about XRP, developers at Ethereum have got their head down. Ethereum enjoyed all the attention in 2017, but the team is now quietly working on the next upgrade, dubbed Ethereum 1x, due next year.
It doesn’t necessarily mean activity or innovation has died down on Ethereum, it just means there are fewer headline-grabbing announcements.
4. The Demise of ICOs
If you wanted to invest in an ICO (initial coin offering) last year, you typically needed to fund it with ether. Now that some ICOs have lost as much as 98% of their value, that excitement has vanished.
Not only is there a lack of ICO hunger, some ICOs are reportedly liquidating their ETH to meet costs. As the premier platform for ICOs, Ethereum is taking a bigger hit than many other major cryptocurrencies.
What do you think?
Is the XRP flippening permanent? Will Ethereum’s big upgrade trigger a resurgence? Leave your comments below!