In what is turning out to be a closely fought battle, Ripple’s XRP is once again within spitting distance of dislodging Ethereum from its position as the number two cryptocurrency by market cap, having briefly achieved the feat last week and again earlier today.
Fight for 2nd Place
Bitcoin is the undisputed king of cryptocurrencies with its dominance fluctuating between 32% to 55% over the last year and a half. Ethereum has enjoyed a happy and secure second place spot. Last year, as Ethereum quickly gathered momentum, people started talking about the possibility of a “flippening,” with Ethereum replacing bitcoin in the long term.
What not even the expert investors and traders had expected was the flippening that took place last week after the sudden surge in Ripple’s price. While XRP was in second place for only a brief period of time before dropping back into third place, it has since been narrowing the gap.
According to popular market aggregator CoinMarketCap, at press time the difference between the market caps of the two cryptocurrencies was less than 3%. At the time of writing Ethereum’s market cap stands at $23.87 billion with XRP following close behind at $23.31.
Reasons for the Drop in Ethereum’s Price
Since August 1, 2018, Ethereum has seen its value decline by more than 44% – more than any other Top 10 cryptocurrency on CoinMarketCap. So what led to such a drastic price drop?
Ethereum, a second generation blockchain, saw good price action last year due to an increased demand, being used as a medium to purchase tokens in ICO sales. A slowdown in the market this year has been a dampener, and the need of the token has dropped.
In addition, projects which were holding ETH collected from their ICO sales, saw their overall market cap plunging and value of the token dropping far below their launch price. Panic set in and projects started dumping their ETH holdings on exchanges, fearing further decline.
What Caused Ripple’s Bull Run?
In contrast, XRP has actually increased in price by more than 30% since August 1, no doubt due in large part to the spate of positive developments over the last few weeks. After announcing the launch of its xRapid solution, the market cap jumped from $ 10.9 billion to more than double in just 3 days.
The addition of some big names like PNC Bank to RippleNet added momentum to the upward price action. The price, after a short breather and consolidation, continues to move upwards. If the momentum continues, XRP will once again climb to the second spot on CoinMarketCap.
Whether Ripple can permanently dislodge Ethereum from its number two place, however, depends on how fast it can onboard more banks to its growing list of customers and the adoption of its recently announced xRapid offering. Ethereum, on the other hand, should accelerate to resolve the scalability issue if it is to maintain its position at number two.
Do you think that XRP can permanently displace ETH from the second place? Let us know in the comments below.
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