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Ripple price: Why is Ripple crashing on the markets? XRP down 30% on record high

The new crypto contender briefly topped Ethereum’s second place in the charts on Sunday, with a staggering market capitalisation of more than £90billion ($123billion).

But  was dealt a crippling blow on Monday morning when its market cap fell almost £30billion ($40billion) in value by the afternoon, according to CoinMarketCap.

Ripple’s signature token, XRP, has not been spared any blows either. Ripple opened at $3.36 on Monday but it was trading just below $2 at 11am on Wednesday.

The sudden collapse in Ripple prices came as a surprise to investors who jumped the crypto bandwagon after XRP skyrocketed an incredible 35,000 percent in 2017.

Unlike its main competitor , Ripple has the backing and support of financial institutions like the Bank of America and Santander, who have adopted the money transfer system.

But Erik Vorhees, CEO of cryptocurrency exchange ShapeShift, argued that this drove the cryptocurrency into a speculative bubble of its own making.

The finance expert accused Ripple of boosting its allure on the markets by exploiting the backing it has received from big banks.

Ripple Prices on CoinMarketcapCOINMARKETCAP

Ripple prices: The XRP token took a hit to its market capitalisation at the start of the week

Mr Vorhees said: “Testing crypto with banks doesn’t make sense. The whole idea of crypto is you don’t need banks.”

The technology behind Ripple is aimed at banks as a faster and more secure alternative to money transfer systems such as SWIFT.

However, some crypto experts have argued this sort of centralisation with banks is antithetical to the decentralised and unregulated nature of cryptocurrencies.

This leads to another possible reason why Ripple and other major crypto tokens took a hit this month – crypto regulation in South Korea.

Investors such as Gabor Gurbacs, at VanEck Associates Corp, argued that any rumour of regulation in East Asia heavily reverberates through the markets.

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Ripple price: Why is Ripple crashing on the markets? XRP down 30% on record high
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Cryptocurrency is a form of digital money that is designed to be secure and, in many cases, anonymous. It is a currency associated with the internet that uses cryptography, the process of converting legible information into an almost uncrackable code, to track purchases and transfers.

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