Ripple CEO Predicts Bitcoin Influence on Cryptocurrencies Soon Will Fade
High correlation of digital currency values with Bitcoin falling in early 2018
The dependency and correlation of digital currency values and Bitcoin are high being the most recognized cryptocurrency in the crypto market. But according to Brad Garlinghouse, CEO of Ripple, the Bitcoin influence era could come to an end soon due to the acknowledgement of differences among these assets and their use cases. On Wednesday, Garlinghouse commented on the market behavior and Bitcoin influence:
There’s a very high correlation between the price of XRP and the price of bitcoin, but ultimately these are independent open-sourced technologies… It’s early, over time you’ll see a more rational market and behaviors that reflect that.
The San Francisco based Ripple is implementing a network for efficient global financial payments. On the other hand, XRP digital tokens are used by financial bodies on the network for processing fast transactions.
According to Garlinghouse, Ripple made a record breaking first quarter after it managed to sign 20 production contracts with new companies. Further on Wednesday, Ripple went public closing a deal with the biggest bank in Kuwait. Companies such as MoneyGram are already in the testing process of making cross-border transactions using XRP.
Bitcoin influence in early 2018
It should be noted that XRP lost nearly 70 percent of its market valuation becoming the worst performer in comparison to other leading cryptocurrencies. According to MarketCoinPrice statistics, digital currencies faced a rough first quarter after all coins made a fall over 50 percent in value. This includes Bitcoin influence which was caught with the same fate falling over 50 percent in just three months.
Garlinghouse believes that, “It’s still a nascent industry, the speculation in the market dominates the trading activity… I think it’s a matter of time until people better understand the different use cases.”
As coinmarketcap.com statistics show, there are over 1,500 digital currencies in circulation. However, the Ripple CEO predicts not even 1 percent of these cryptocurrencies will survive 10 years. He sees that, “There’s going to be a bit of a correction along the way here where a lot of the players in the space that don’t actually solve a real problem are going to get washed out.”
Most of these digital currencies have no objective or use and used as a way to grab money from investors through initial coin offerings (ICOs). Garlinghouse stated that the Securities and Exchange Commission has shut down such ICOs and issued warnings for similar pump-and-dump schemes;
The SEC is getting involved as they should because there have been frauds committed… We have been an advocate of yes the government should get involved, the government should be protecting investors and companies but there’s also examples of real utility.
ICO and Securities
Jay Clayton, chairman of SEC stated in March that all ICOs constitute securities. But, Ripple points out that it maintains XRP in a different manner in contrast to conventional securities such as stocks. Clayton stated the following on XRP;
If you own XRP, you don’t own rights to the profits or any dividends to the company… XRP has real utility.