For ripple, it has been an exciting first two weeks of 2018. (See also: Is The Rise In Ripple’s Prices A Bubble?) During that time, the price of XRP has climbed to well over $3 per coin, propelling ripple past bitcoin cash and ethereum to make it the second-largest digital currency in the world by market cap. This was a significant move, as it meant that ripple was second only to bitcoin, the original and leading cryptocurrency, in its significance. (See more: What’s Propelling Ripple’s Massive Price Gains?)
Then, when analysts and investors seemed sure that ripple was poised to continue its massive growth spurt, it reversed direction. As of this writing, XRP is valued at $2.33 per token after having fallen steadily for several days. In the process, ripple’s price has dropped back down past ethereum to claim the third spot on the list of largest digital currencies by market capitalization. Why the sudden drop in value?
Is Coinbase to Blame?
A recent article by Bloomberg suggests that one reason why ripple seemed to deflate in the past several days is an external factor: namely, the news that Coinbase would not add any new coins to its offerings. Coinbase is one of the most popular and largest digital currency exchanges in the world. (See more: Coinbase: What Is It and How Do You Use It?)
Late last week, Coinbase announced via Twitter that it would not be adding new offerings to its customers at this time. CEO Brian Armstrong indicated that “any statement to the contrary is untrue and not authorized by the company.” Currently, Coinbase offers trading in bitcoin, bitcoin cash, ether, and litecoin. Litecoin is currently the seventh-largest digital currency by market cap, according to CoinMarketCap.com.
Coinbase Has Been Responsible for Big Moves Before
Coinbase is large enough to exert major influence on the price of digital currencies. This has been seen previously. Bitcoin cash rose by 45% in mid-December when the exchange announced that it had added it to its cryptocurrency offerings.
There may be a relatively simple reason for the impact, particularly in the case of bitcoin cash. Coinbase has a massive customer base, and those customers are able to access transactions in bitcoin cash much more easily now that Coinbase offers the digital currency. Although ripple made major gains on its own and without being a part of the Coinbase offerings, the exchange’s decision nonetheless suggests to investors that ripple may not be as important.
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