Cryptocurrency Market Down 54% in Q1 2018, Losses Top $500 Billion

  • In the first quarter, most major cryptocurrencies took a beating as the market lost over $500 billion
  • Bitcoin, the flagship cryptocurrency, is only now starting to recover

Cryptocurrencies had a rough first quarter with several governments throughout the world cracking down on crypto related businesses. According to Coinmarketcap data, that does not include data from South Korean exchanges, at the start of the year the overall cryptocurrency market cap was around $611 billion. By the end of the quarter, $342 billion was wiped off the market, a 56 percent drop.

On January 7, 2018, the total market capitalization skyrocketed to a peak $831 billion, but lost $315 billion by the end of the month.   

Crypto Market Cap And Bitcoin’s Performance

In the first quarter (Q1), most major digital currencies took a beating. The world's largest cryptocurrency, , lost half its value in Q1. Nevertheless, bitcoin still did better than most altcoins. The only positive for bitcoin in the first quarter was an increase in its dominance from 38.676% to 45.5%.

At the start of the year, bitcoin was valued at $14,268 against the US Dollar. Soon after, the cryptocurrency witnessed a price surge of 23 percent, which saw its value rise to $17,568. Since then bitcoin kept losing its value and never returned to the $17,000 mark.  Q1's lowest point for bitcoin value was on February 6, 2018, when its price was of $6,048. At present, the bitcoin price is fluctuating around $7,400.

Altcoins Lost Ground To BTC In Q1

Most of the top altcoins prices have dipped in the Q1. At the start of the year, Ripple was the second biggest cryptocurrency by trading volume, followed by . On January 1, 2018, dominance in the market was 14.29% whereas Ethereum dominated only 12.18%. On January 4, Ripple's price surged to $3.84 against the dollar, raising its dominance to 19% in the market. On January 8 both Ripple and Ethereum leveled with about 14% dominance over the crypto market and soon Ethereum took the spot as the second largest cryptocurrency by trading volume.

The highest point of Ethereum’s market cap was on February 1, when its dominance marked at 22.53%. At the start of Q1, Ethereum’s market volume was $73 billion and by the end, it's dropped to around $38 billion, a drop of over 48%. Whereas Ripple’s market cap experienced a drop of almost 78%, reducing from about $89 billion to $20 billion.  

In the first quarter of 2018, the entire crypto market suffered badly. However, bitcoin’s price may not have seen a surge but its dominance in the market have increased gradually. As for altcoins most of them had a bloody quarter losing ground to bitcoin.

Ripple CEO: 'You Don’t Want to Use BTC at Starbucks'

On Thursday (January 23), Brad Garlinghouse, the CEO of Ripple, told the Wallet Street Journal (WSJ) that Bitcoin is not a good means of payment because BTC transactions take too long.

The Ripple CEO's comments were made during his talk with Phillipa Leighton-Jones (Editorial Director for Innovation) at a Ripple-sponsored event (organized by the WSJ) called "Ripple Panel: Changing the Finance Industry From Within" held alongside this year's World Economic Forum Meeting in Davos, Switzerland.

Although we don't yet have a full transcript of this interview, we do know about two of the things he talked about thanks to tweets by Asheesh Birla, SVP of Product at Ripple, who was at this event.

First, it seems that although the Ripple CEO likes Bitcoin as a store of value, he does not see (at least, as of now) as a viable means of payment. The example he gave was paying for a cup of coffee at Starbucks. He believes that BTC transactions take so long to confirm that by the time you have finished paying for your coffee, "it'll be cold." 

Second, within the next 12 months, he sees several companies in the crypto space holding initial public offerings (IPOs) and he wants Ripple to be "on the leading side" since this is "a natural evolution" for Ripple, which raised $200 million via a Series C funding round (which valued the company at $10 billion) last month. 

On Wednesday (January 22), Ripple published the "Q4 2019 XRP Markets Report", which is a quarterly report that allows Ripple to "voluntarily provide transparency and regular updates on the company’s views on the state of the XRP market, including quarterly programmatic and institutional sales updates, relevant XRP-related announcements such as Xpring and RippleNet partnerships and commentary on previous quarter market developments." 

In Q4 2019, Ripple's total XRP sales were down just over 80% compared to the preceding quarter ($13.08 million vs. $66.24 million). Ripple "continued the pause of programmatic sales" (to crypto exchanges), and focused exclusively on over-the-counter (OTC) sales to "a few strategic partners, who are building XRP utility and liquidity in strategic regions including EMEA and Asia."

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