The Chief Technology Officer of Ripple Labs, David Schwartz, recently discussed how cryptos future, namely XRP and other altcoins could be threatened by being coupled with Bitcoin.
Despite the cryptomarket growing, with an increase in on-ramps, exchanges, platforms and trading pairs, Bitcoin’s price remains heavily correlated with the rise and fall of the entire crypto market.
In fact, since January 2018, altcoins have seen a 90% dip against BTC, and 95% + drop as a result of BTC itself losing 85% of its value. Altcoins appear very tightly bound to the cost of Bitcoin with most investors failing to separate the two. A common analogy is comparing Bitcoin and the growth of cryptocurrency to the growth of the internet, where startups would fight for peoples attention.
Schwartz made a statement on Twitter, explaining how XRP is coupled with Bitcoin.
“I think XRP is coupled with BTC for the same reason all other cryptos are. The market thinks either cryptos will catch on or they won’t but doesn’t yet really distinguish between them. It’s like back in 2000 when we were all trying to figure out whether search engines would be big moneymakers or not and we were nowhere near ready to figure out whether the dominant one would be Google, Ask Jeeves, Excite, Altavista, or Yahoo!”
While this is just his opinion, it does bring some insight in how the cryptocurrency market might go forward in its growth. Especially Ripple as a solution to target cross-border payments, a wide open field for improvement due to the traditional financial system that requires banks to park huge sums of cash in various local currencies around the world in order to fund payments that can take up to five days.
Banks are increasingly becoming interested in blockchain projects, trialing various projects that use blockchain technology to transact digital assets on decentralized platforms, settling payments within seconds, reducing fees and eliminating friction.
I’m quite confident that payments are about to be severely disrupted because they are just too broken and we have the tech to fix it. I get less confident when the question is what tech will do the disruption or where we’ll end up. 1/2
— David Schwartz (@JoelKatz) July 9, 2019