Anyone invested in XRP watching CoinMarketCap diligently probably had a small panic attack when they saw this sudden deflation. Shelves like this will always cause panic selling — owners who don’t want to be left “holding the bag” if the currency deflates further.
Panic sales don’t usually try to get the maximum market value for their trade, and the value goes down. This is exactly the same premise that governs real market crashes.
The difference here is that cryptocurrency markets don’t have seat belts and safety nets the way fiat currency markets do. So, as you can see on the chart, after the staggering plunge from $120 billion to $103 billion, the market then ate it a short while later, dropping the value to a daily low of $80 billion.
And while cryptocurrency markets don’t have regulations surrounding market runs and mass exodus, the collective group of investors has learned from the follies of market’s past and held on while the currency restabilized. As of right now, the market cap has floated back up to $91 billion.
Most people reading about cryptocurrencies — and markets in general, for that matter — see numbers like $147 billion next to a phrase like “market cap” and believe those numbers to be some kind of objective evaluation of the commodities worth. However, that is strictly not the case. Read more from interestingengineering.com…
thumbnail courtesy of interestingengineering.com