The intense downtrend of the crypto market is finally having a toll on the best performing digital asset of the month.
Ripple (XRP), now the second most valuable cryptocurrency in the market, is no longer up in value on a monthly basis. Throughout the past 30 days, XRP has maintained the $0.5 level relatively well with minimized losses even during a period in which the price of BTC and other major cryptocurrencies fell by around 10 to 20 percent.
What Caused XRP to Drop?
As a liquidity network that provides major banks and financial institutions the ability to move cross-border payments with low fees, a large supply of XRP is crucial for the Ripple blockchain network to operate.
Similar to EOS, which implemented several controversial rules on its protocol to disallow investors from holding onto EOS for an extended period of time without using it, XRP needs to have a certain amount of XRP in circulation to guarantee seamless transactions for financial institutions.
In 2017, Ripple Labs CEO Brad Garlinghouse explained that XRP is placed in an escrow account and is distributed by Ripple Distribution to the public.
“The recently launched Escrow feature in XRP Ledger allows parties to secure XRP for an allotted amount of time or until specific conditions are met. For example, Escrow allows a sender of XRP to put conditions on exactly when a payment can be completed, so the payment remains cryptographically locked until the due date,” Garlinghouse said.
This week, around $16 million worth of XRP was moved from the Ripple Distribution wallet to an unknown wallet, injecting more XRP into the market.
CCN |
https://www.ccn.com/ripplexrp-finally-suffers-major-price-drop-as-crypto-market-wipes-out-12b/
