Ripple has lead cryptocurrencies lower across the board today with the likes of Bitcoin, Bitcoin cash, Litecoin, Ethereum and Ripple all falling between 5% to 15% over the past 24 hours.
Ripple is now changing hands for just US$0.351, although what’s behind the price falls today is not certain as the price of cryptocurrencies is determined by multiple random factors including sentiment and news flow.
One factor that doesn’t have much influence on the price of cryptocurrencies is valuation, as the digital currencies don’t spit off any cash flows to owners and as such cannot be valued using conventional methods.
Some cryptocurrencies can to an extremely limited extent be used in exchange for goods and services which gives them a relative value with crypto bulls arguing that their finite nature also gives them an advantage over traditional currencies that are vulnerable to the corrosive effects of inflation.
Given the issues it seems the crypto space is not for the feint hearted or serious investors, but its wild popularity means it’s possible the prices of digital currencies move higher over time.
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Motley Fool contributor Tom Richardson has no position in cryptocurrencies. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.