For a short period of time, Ripple overtook Ethereum to become the second largest cryptocurrency in the global market behind bitcoin, with a market valuation of $ 72 billion on December 29th.
Ripple Mania in South Korea
Since then, Ripple’s market capitalization has fallen slightly from $ 72 billion to $ 70.3 billion, allowing Ethereum to regain its position as the second largest cryptocurrency.
It is the second time this year that a cryptocurrency has passed Ethereum in the market assessment. In November, Bitcoin Cash briefly overtaken the market valuation of Ethereum, during a period when the rigid fork proposal SegWit2x was rejected by the market and most of the supporters of SegWIt2x switched to Bitcoin Cash.
Over the past few weeks, CCN has reported on several occasions that South Korea and Japan’s demand for Ripple is fueling its price growth. At the time of reporting, the price of Ripple in South Korea remains above $ 2, 10% higher than the global average price.
Ripple’s demand has grown in the two countries due to the partnership between the Japanese banks led by SBI Ripple Asia and South Korea’s financial conglomerates to integrate Ripple blockchain-based technologies by January 2018. Ripple Labs and the developers of the Ripple expected billions of dollars to be processed regularly on the RIpple network.
Price of cryptocurrencies on Korbit
As the founder and CEO of Korbit, Tony Lyu, told Nathaniel Poppers of the New York Times, once investors in the South Korean market are optimistic about a certain asset and its value continues to rise, every trader in the market moves towards that particular asset. The exchange of cryptocurrencies in South Korea is strongly influenced by FOMO or fear of losing.
“The word spreads very quickly in Korea Once people are invested, they want everyone else to join the party, there was this huge, almost communal movement around it,” said Lyu.
Last month, the South Korean market rallied behind Bitcoin Cash, pushing the price of BCH into the local market at $ 3,700. This month, Ripple was the focal point of South Korean investors’ portfolios.
Peter Brandt, an expert and highly respected trader, said that any investment or trade by FOMO is discouraged and it is an emotion that investors should not reflect on their operations.
“In my opinion, FOMO is one of the worst emotions that any trader can own.I can not count the number of traders I know who have exploited FOMO.You learn to resist or they will bury you,” said Brandt. “It is my opinion that many cryptomaniacians misunderstand FOMO The markets are pushing higher not because of the purchase by FOMO, but the markets perceive that those with the FOMO are missing, when the mass FOMO eventually throws in the towel to buy a top of a certain ladder. ”
Moreover, in a smaller market like South Korea, cryptocurrency investors often seek reaffirmations from major operators or institutions to justify their operations. For local traders, the widespread adoption of Ripple by major banks was a positive sign for investment.
Is Ripple sustainable?
Earlier this year, Ripple processed $ 180 million for the Swedish bank SEB. If Ripple can process many billions of dollars on a daily basis on behalf of its partner banks, the high capitalization of Ripple can be justified.
However, the market capitalization and price of Ripple should not be justified by TAM, or total addressable market, but rather by actual transaction volumes and user activity.