Everyone knows that Bitcoin has a strong effect on the price of other cryptocurrencies. As the price of Bitcoin falls, many other cryptocurrencies face the same fate and vice-versa. This is one of the reasons why overtaking Bitcoin may be complicated.
According to Brad Garlinghouse, CEO of Ripple, this correlation between Bitcoin and other cryptocurrencies may end soon. As other markets are beginning to acknowledge the uniqueness of assets, Bitcoin may lose its grip on other cryptocurrencies.
Speaking at CNBC Power Lunch, Garlinghouse said:
“There is a direct relationship between the price of Bitcoin and Ripple. However, this isn’t going to continue for long as Ripple and Bitcoin are independent, open source technologies. It’s still early. Within no time, the market will be more rational.”
A Background of Ripple
Ripple is a San Francisco-based company that has the primary aim of creating a network that enables financial payments globally. The Ripple XRP is the name of the digital token generated by the company which can be used to perform transactions quickly.
The company signed in 20 production contracts with different firms recently. It also made a deal with many other companies including the largest bank in Kuwait. Many other companies like MoneyGram are already testing Ripple’s efficiency for cross-border payments.
Despite the recent partnerships, Ripple lost 70% is its value and ranked as one of the worst performers during the first quarter of 2018. It wasn’t just Ripple; the entire cryptocurrency industry suffered losses with Bitcoin falling by over 50% during that period.
“The market speculation is what determines the trading activity. The industry is still nascent. However, it’s only a matter of time till people start understanding the difference.” Garlinghouse added.
Garlinghouse said that 99% of the 1500 cryptocurrencies in circulation today will not exist in the next ten years. Only a few of the cryptocurrencies have shown promise. The ones that cannot stand out will eventually be removed from circulation.