Unfortunately for cryptocurrency traders things have taken a turn for the worse in the industry this afternoon.
At the time of writing, nine out of the ten largest cryptocurrencies have fallen into the red since this time yesterday.
One of the hardest hit has been the Ripple (XRP) price. After a bright start to the day, the third-largest cryptocurrency has shed 6.5% of its value over the last 24 hours or 4.5% since this morning.
XRP is currently fetching US$1.28 per coin, reducing its market capitalisation to US$49.6 billion.
This latest decline means that the former crypto darling has lost two-thirds of its value since peaking at US$3.84 on January 4.
As a comparison, during the same period the bitcoin (BTC) price has lost approximately 26% of its value.
Why has Ripple fallen so hard?
Whilst I believe that Ripple's technology is arguably the best out there and far more deserving than bitcoin to be the largest and most widely adopted cryptocurrency out there, I think investors got a little ahead of themselves.
This led to the XRP price rocketing from US$0.0065 in January 2017 all the way to US$2.47 by the end of the year. Whilst it could one day justify a market capitalisation of over US$100 billion again in the future, I think its adoption will have to increase significantly before that happens.
As a result, I feel a lot of traders that bought in with the intention to make a quick buck are selling now, realising that this may not be a quick way to get rich after all.
Furthermore, with crypto crackdowns occurring across the world, I expect there could be further pressure on the industry in the coming weeks and months that weighs heavily on prices across the board.
So although Ripple's XRP is my pick of the cryptocurrencies, I wouldn't be a buyer until the industry has gone through a major overhaul. Until then I feel that there's more chance of losing a quick buck, then making one.
