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David Schwartz of Ripple fame and XRP’s market dynamics

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Ripple

Ripple’s XRP has been remarkably resilient during the nightmarish days we’ve seen in the crypto market over the last couple of weeks. Its losses have been in the single-digit zone, while most others have been in two numbers.

In the current adversity, it’s even managed to displace Ethereum and become the world’s second largest cryptocurrency by market capitalization. Mind you, that doesn’t mean it’s not losing value. It is, but it’s going down smoothly while many other assets (Bitcoin included) have been in free fall.

The token is trading at $0.354 as we write this, which means it’s approaching its first support level ($0.32323). If it reaches it, it could bounce back (doubtful in the current bearish general market) or go down even further to the second support level of $0.26704.

Things being what they are, it seems a good idea to stop for a minute and to review some of the basics.

Almost exactly one year ago, David Schwartz (Ripple’s Chief Technical Officer and former Chief Cryptographer) posted a series of tweets in his official account in which he explained why a higher price for the XRP token is good for everybody (whether you hold XRP or not). It’s all about market dynamics.

It all comes down to this: if XRP becomes really expensive, say, a million dollars per token, then a lot of money would flow in the market with the movement of only a few tokens. If you owned a million dollar XRP token and would like to buy a million-dollar house, then you would sell your token, get your million, and the market wouldn’t feel a thing because only a token was traded.

The current situation is the opposite. If you wanted to get a million dollars out of your current XRP wallet (we wish you’re so lucky), you would need to sell 2.79 million tokens. That may not seem like a lot if you take into account that 1.17 billion XRP have been traded only in the last 24 hours.

But since you are not the only crypto aficionado trying to cash out of XRP, the added pressure of all those who, like you, want to use those million bucks for something else, will move the market a lot while, if the price was much higher, the same amount of money would still move around, and the market wouldn’t feel a thing. There’s a name for this phenomenon: cheaper payments.

The community reacted favorably to Mr. Schwartz’ message. One of his followers replied to the tweet in this terms:

“I believe you hit the nail on the head. This brilliant plan will involve multiple entities working in coordination. I 100% agree this will happen. But regulatory clarity via a global framework, possible we see this at the upcoming G20 meeting. Once established, plan will commence!”

An overly optimistic XRP enthusiast wrote,

“I’m ready guys! I’m in front of the factory @Lamborghini waiting for 1 Mil. #XRP just give me a sign!”

And why should you care about this? Especially if you’re not a Ripple fan? This should assure you that the crypto market will recover and prices will go up again. Why? Because it’s in every coin’s, every investor’s and every trader’s best interest. So don’t despair. Just be patient, disciplined, keep watching the market and keep reading our articles.

For real-time trade alerts and a daily breakdown of the crypto markets, sign up for Elite membership!

Disclaimer: This article should not be taken as, and is not intended to provide, investment advice. Global Coin Report and its affiliates, employees, writers, and subcontractors are cryptocurrency investors and from time to time may or may not have holdings in some of the coins or tokens they cover. Please conduct your own thorough research before investing in any cryptocurrency and read our full disclaimer.

Image Courtesy of Flickr.

Currency Market

12 Peers Capital Markets Purchases DigitalBits XDB Token

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12 Peers Capital Markets , a broker-dealer and capital markets firm has announced its support for DigitalBits, a blockchain protocol focused on consumer digital assets such as loyalty points, rewards, and branded stablecoins.  The traditional market brokerage firm has purchased the DigitalBits XDB token, after recently announcing “a new found investment thesis focused on identifying blockchain projects that improve efficiencies across global markets,” it said in today’s announcement.

DigitalBits is an enterprise-grade blockchain protocol for supporting consumer digital assets, specifically branded currencies.  The company believes that branded currencies play an integral role in driving consumer behavior, but many of these programs are dated by today’s technological standards.  “These limitations have stifled value transfer, resulting in the accumulation of large amounts of idle capital – in 2017 US corporations held in excess of $100 billion in unused points liability,” the DigitalBits experts explain.  

The DigitalBits blockchain supports tokenization of existing and new consumer digital assets.  The XDB Foundation, which was formed earlier this year, is a neutral agnostic non-profit organization to enhance the DigitalBits blockchain and ecosystem, engage partnerships and building a robust ecosystem for users. Commenting on the 12 Peers Capital Market announcement, XDB Foundation’s Managing Director Michael Gord said that it is great to see traditional firms show interest in blockchain technology. …

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Currency Market

AllianceBlock Completes TGE, Lists ALBT Token on Uniswap

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Big day for the Dutch-based AllianceBlock project today. After more than two years in development, the stealth mode is finally off.  AllianceBlock announced its completion of the Token Generation Event (TGE) . The newly generated AllianceBlock token (ALBT) was also instantly available on Uniswap – an automated liquidity protocol that has been gaining traction recently. Unlike centralized and most decentralized exchanges that match buy and sell orders to determine prices and execute trades, Uniswap uses a simple math equation and token pools, plus ETH to execute trades.

AllianceBlock Uniswap
 

Just weeks ago AllianceBlock reported wrapping up its private sale, which was 1,200% oversubscribed and helped raise $0.5 million. The next step for AllianceBlock is coding the platform and expanding the ecosystem.  The team is gearing up for the mainnet launch, which is set for the second quarter of 2021. The AllianceBlock platform is based on the Prometheus Protocol, which is a multi-layered architecture designed to solve some of the biggest problems of the traditional finance (TradFi) industry while funneling potentially trillions of dollars of traditional capital into the DeFi industry, the company says.

AllianceBlock is raising the bar high – it is building a “globally compliant decentralized capital market” by utilizing a blend of several decentralized technologies. To help bridge traditional markets and DeFi, the company is focusing on three cornerstone issues — compliance, security, and user experience, which are…

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Currency Market

Could The Rise of Yearn Finance Harm the Long Term Viability of Bitcoin?

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Cryptocurrency

Even in the highly unpredictable world of crypto, 2020 has made for an exceptionally volatile year so far. 

The summer months have been punctuated the unprecedented rise of the decentralized finance (DeFi) movement followed by heavy falls across the cryptocurrency landscape. 

The jewel in the crown of DeFi, yearn.finance, was catapulted to values upwards of $38,300, and a market cap of over $1.1 billion just months after its launch. Backed by advanced and practical DeFi applications like smart contracts and blockchain-based insurance, DeFi tokens like YFI are supported by exciting and tangible technology.

Given their advanced frameworks, could this mean that the DeFi boom for yEarn and its counterparts will harm the long term viability of more speculative traditional cryptocurrencies like Bitcoin? Or could the world’s oldest and most famous cryptocurrency push back against the brave new world of decentralized finance?

Why Yearn.Finance is Different

YFI is certainly a cryptocurrency with a difference. Writing for Forbes, Joseph Young has attributed the rise of Yearn.Finance to four major components: a unique supply, an active community, a respected developer, and innovative products. 

Significantly, yearn.finance developer, Andrew Cronje, rebranded and relaunched yearn.finance with a suite of new and cutting-edge products. He also released YFI with no premine, a significantly limited supply of just 30,000 tokens, and no founder reward. 

These factors made the…

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