We are now seeing a widespread decline in the prices of most digital currencies as market bears shun fundamentals and embark on a broad-based pullback. The combined capitalization of the crypto-currency market fell 6.35% to $1.05 trillion, its lowest level in weeks.
Crypto-currency market collapses globally
Bitcoin is once again leading the broader market decline after falling 6.78% to $21,841.95, a price very close to its monthly low of $20,776.82. Ethereum also fell sharply by 5.97% to change hands at $1,736.18.
The majority of altcoins took a dive on Friday, with Binance Coin losing 8.16% to $283.01, Cardano slipping 12.32% to $0.473, Solana falling 11.09% to $36.37, and XRP currently changing hands at $0.3435 after dropping 8.31% in the past 24 hours.
The digital currency ecosystem is very volatile, and crypto currencies could react to any news in a negative way. While the source of this decline is not yet clear, there are digital currencies with definite bullish fundamentals that are still on the general bearish train.
XRP, for example, has been in the spotlight for nearly two years now, as it has been involved in the legal battle between the U.S. Securities and Exchange Commission (SEC) and blockchain payments company, Ripple Labs Inc. While the outlook is generally bleak, Ripple is making up for it with functional business partnerships that will help ensure proper use of the XRP coin.
Ripple recently partnered with Travelex Bank to launch a crypto-currency payment gateway in Brazil. This payment venture is expected to use, among other things, the XRP coin.
“Brazil is a key market for Ripple due to its importance as an anchor for business in Latin America, its openness to crypto-currencies, and national initiatives that drive innovation in financial technology. As a result, the market is experiencing an explosion of activity as institutions look to adopt crypto and blockchain technology to solve customer pain points “, said Brad Garlinghouse, CEO of Ripple.
Misconceptions about Ethereum
While investors are supposed to react positively to this news, the exact opposite is recorded.
One major explanation that could be given for the downward trend could be related to Ethereum. With Ethereum 2.0’s The Merge event highly anticipated, the clarification of major misconceptions about the protocol’s proof-of-stake (PoS) released earlier this week by the Ethereum Foundation may have disappointed many supporters.
Ethereum developers noted that the redesigned protocol will not necessarily lead to lower gas fees. In addition, it was pointed out that transaction speed may also not change significantly from what it was before. These reality checks may not go over well with the public, and many were hoping that the new Ethereum could be a more formidable competitor against the so-called Ethereum killers in operation today.