XRP prices took a tumble in the last 24 hours, falling below the $0.20 handle as fears of a Chinese crackdown solidified. The Ripple to USD exchange rate fell roughly 3.58%, while the Ripple to Bitcoin rate only edged down by around 0.08%.
Most of the pessimism was drawn from China’s potential closure of cryptocurrency exchanges.
Here’s a rough sketch of what we know and when we knew it.
Last week, there were rumors that the government was considering a crackdown. At first, it seemed those rumors were being confused with China’s ban on initial coin offerings (ICOs), but then The Wall Street Journal corroborated it with anonymous sources.
According to the Journal, the Chinese government was growing impatient with the “disorder” of cryptocurrency exchanges. That’s when crypto values began to fall in earnest.
Now there is a report from China’s National Internet Finance Association (NIFA). It says [emphasis added], “Any trading platform for any kind of so-called ‘coin’ has no legal base of foundation in China.” (Source: “Bitcoin Exchanges Lack Legal Foundation, China Internet Finance Association Says,” CoinDesk, September 13, 2017.)
Considering the incestuous relationship between China’s government and its civic institutions, many investors are treating the report as an official statement. But let me be clear: neither the People’s Bank of China nor the State Council has issued an official ruling on exchanges.
Nevertheless, perception matters. Smaller exchanges are already shutting their doors, citing regulatory burdens, while the bigger ones like OKCoin and Huobi are waiting on tenterhooks.
But that wasn’t the only piece of Ripple news to weigh on the Ripple price prediction. Jamie Dimon of JPMorgan Chase & Co. (NYSE:JPM) also took the opportunity to kick cryptocurrencies while they were down.
After saying to a room full of bankers that Bitcoin “is a fraud,” the Wall Street tycoon lacerated anyone that invests in cryptocurrencies as “stupid.” (Source: “JAMIE DIMON: Bitcoin is a fraud that’s ‘worse than tulip bulbs’,” Business Insider, September 12, 2017.)
However, Dimon neglected to mention that his bank has invested millions into blockchain technology. What exactly does that make them, then?
Jamie Dimon is an opportunist. He likely fears public blockchains as an existential threat to the global financial network, which is why he discredits them while they are vulnerable.
But it would stretch incredulity for him to downplay Ripple.
Dimon is clearly aware that, as an enterprise blockchain, Ripple would upgrade the existing system, not upend it. We know this because he commissioned the development of one. It’s called “Quorum.”
Ripple prices should not be affected by his comments over the long term. Likewise, Ripple might be one of the few cryptocurrencies to escape a Chinese crackdown unscathed.
Think about it: less than five percent of XRP trading volume comes from Chinese exchanges.
Our Ripple price prediction didn’t claim that China was important to XRP because it was a big pool of funding, but rather that it was an excellent opportunity for Ripple to add new financial firms onto its network. That optimism still stands.