XRP’s expansion into China had been arguably the best Ripple news this summer, but now it seems insignificant amid rumors that Chinese regulators will close domestic cryptocurrency exchanges.
Although rumors of this supposed crackdown have been swirling for days, they were given fresh life by a report in The Wall Street Journal.
Based on anonymous sources, The Wall Street Journal is reporting that Chinese authorities are frustrated with the “disorder” of cryptocurrency markets.
Considering that similar frustrations led to the banning of initial coin offerings last week, a shutdown is being taken more seriously. Investors are especially sensitive now that The Wall Street Journal confirmed the rumors.
Over the last 24 hours, XRP to USD prices fell roughly 9.29% to around $0.198841, while XRP to BTC prices edged up 1.85%.
However, this was the first time that Ripple fell below $0.20 since September 5. It is a serious predicament, but readers should take some comfort in the fact that trading volumes fell below $100.0 million.
This is a rare threshold for Ripple to fall beneath, and it signals that many investors are sitting on sidelines, waiting to see what happens.
Chinese exchanges like OKCoin.cn and Huobi are massive centers for trading cryptocurrencies, meaning that their closures would have an outsized impact on the market. Billions of dollars worth of money would be lost.
That said, our Ripple price prediction does not depend wholly on Chinese trading.
Three of the largest trading sources for XRP come from Korea, dealing in XRP to KRW transactions, and followed by XRP to BTC exchanges at the No. 4 and No. 5 spots.
Chinese exchanges account for less than five percent of trading volume, meaning that the impact on demand should be negligible.
However, if Chinese authorities turn against cryptocurrencies, they could make it difficult for Chinese financial firms to join Ripple’s interbank settlement platform.