For a brief period of time, Ripple overtook Ethereum to become the second largest cryptocurrency in the global market behind bitcoin, with a $72 billion market valuation, on December 29.
Since then, the market cap of Ripple has fallen slightly from $72 billion to $70.3 billion, allowing Ethereum to regain its position as the second largest cryptocurrency.
It is the second time this year that a cryptocurrency has overtaken Ethereum in market valuation. In November, Bitcoin Cash briefly surpassed the market valuation of Ethereum, during a period in which the SegWit2x hard fork proposal was rejected and supporters moved to Bitcoin Cash.
Putting things into perspective; Bitcoin is the largest digital currency with a market capitalization of roughly $241 billion, accounting for about 41.5% of the total cryptocurrency market cap tracked by CoinMarketCap.
Ripple accounted for about 12.4 percent, while ethereum was around 12.3 percent, the website showed.
For those unaware of Ripple, it is the name of a San Francisco-based start-up using blockchain technology to develop a payments network for banks, digital asset exchanges and other financial institutions.
The company claims that more than 100 financial institutions use its network. Owning 61% of the 100 billion XRP in existence, at yesterdays (29/12) record high prices, Ripple had a net worth of approximately $115.9 billion.
Why has South Korea embraced Crypto Currencies?
The demand for Ripple notably in South Korea as well as Japan is a primary factor that is fueling its price growth. This is due to the partnership between Japanese banks led by SBI Ripple Asia and South Korean financial companies to integrate Ripple’s blockchain-based technologies by January 2018.
On Wednesday (27/12/2017) South Korea’s government held an emergency meeting about regulating bitcoin on Wednesday.
The Asian nation is the third biggest market for buying and selling bitcoin, behind Japan and the U.S and it’s also interesting to note the country is also the second largest market for Ethereum, Litecoin, and Ripple.
Many Koreans are curious about new technology, and the Governement aren’t able to keep up with the rise in crypto prices.
Despite banning ICO’s in September, it offered a way for entrepreneurs to raise money through selling smart tokens. On Wednesday, South Korea said it would also start banning miners from opening accounts on exchanges. With the lack of taxes and possibility to make quick returns, investors are jumping on which pushes up the price.
Is ripple Sustainable?
If both Ripple and Ethereum are using similar methods to try gain market dominance, why is Ripple growing so rapidly when Ethereum isn’t?
Ripple has been very volatile since it’s rise but it is growing. While the recent news about Ripple makes sense for the rapid growth seen over the last couple of days it does not seem to have any meaningful basis and that is a reason for why this period might just be unsustainable growth.
Furthermore, last week’s news that 3 major credit card companies in Japan are using Ripple has led to a number of investors and casual traders to believe that investing in altcoins is a get rich quick scheme, without really understanding what they are.
This increased trading has meant that the price of Ripple has been inflated well beyond it’s true value. When this becomes clear, there is a high possibility that the bubble is likely to burst, resulting in a number of losers.
A more relevant question is when will the Ripple Bubble burst, rather than will it burst?
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