What a difference a couple of weeks can make in the world of cryptocurrencies.
On January 4 the price of Ripple's XRP rose as high as US$3.84, giving it a market capitalisation of US$148 billion.
This had many believing that it could be on the verge of overtaking bitcoin as the king of the cryptocurrencies.
But that doesn't appear to be the case any time soon after a horrific night for the altcoin.
At the time of writing the XRP price is fetching US$1.06 per coin, down almost 40% since this time yesterday according to Coin Market Cap.
This has reduced XRP's market capitalisation down to US$41.1 billion, meaning the cryptocurrency has lost a staggering 72% of its value in less than two weeks.
What happened?
Whilst it is unclear exactly what has triggered the meltdown in the crypto world overnight, a lot of fingers are being pointed in the direction of China and South Korea after regulators looked into cracking down on the industry.
Low trading volumes in South Korea appear to have the market concerned. South Korea has accounted for approximately 15% of daily bitcoin volumes in recent weeks, but this is believed to have sunk into the low single digits this week after South Korea Finance Minister Kim Dong-yeon warned that exchanges could be shutdown.
Over in China the government is reportedly considering similar moves, including blocking access to domestic and overseas exchanges. I suspect that the prospect of not being able to get their money back, should access be blocked, could have triggered some selling overnight in China by traders.
Should you snap up some XRP on the cheap?
While I continue to believe that XRP is vastly superior to bitcoin and could one day be the number one cryptocurrency, like I have said previously, at this stage it is unclear whether XRP will become number one by rising above bitcoin or whether it will be by virtue of the bitcoin price crumbling.
Because of this, I think it would be prudent for investors to watch on from the safety of the sidelines rather than gamble on a rebound.
