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Ripple Expects Lower Q2 Forecast for XRP as it Addresses Fake Volume Reports - Will Price Suffer?

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Ripple Expects Lower Q2 Forecast for XRP as it Addresses Fake Volume Reports - Will Price Suffer?
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Disclaimer: The opinion expressed here is not investment advice – it is provided for informational purposes only. It does not necessarily reflect the opinion of U.Today. Every investment and all trading involves risk, so you should always perform your own research prior to making decisions. We do not recommend investing money you cannot afford to lose.

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There have been growing concerns about the true nature of volume on exchanges when it comes to digital assets.

Many exchange have been accused of over inflating their volume for their own games, and there are a number of them who have been caught.

This inflation of volume not only boosts the worth and value of the exchange, but also inflates certain coins. This unjust enrichment is both wrong, and unfair.

To this end Ripple, the company behind the XRP token, is trying to take steps in addressing the inflation, but knows it could be detrimental to their forecasting.

Ripple have said that they are expecting in the short term, that their sales of XRP in Q2 2019 will be substantially lower (as a percentage of reported volume) than in the previous quarter.

The elephant in the room

Reported volume in digital asset markets has been called into question by a number of major third-party sources, some of the magnitude of the SEC.

The recent SEC report from Bitwise is perhaps the most widely cited, but several others, including the Blockchain Transparency Institute and Data Accountability & Transparency Alliance (DATA), have also issued reports suggesting exaggerated numbers and overall inaccuracy in the way data is reported - by up to 95 percent.

Falsified volume data is damaging to the entire cryptocurrency ecosystem as it may overinflate some of the parties operating in it unjustly. From exchanges to coins, there is false information that affects the investment and use of such services.

Ripple’s plan

To this end, Ripple have admitted that they are going to try and address the concerns and the questions raised about the overall reliability of market structure and reporting at digital asset exchanges worldwide:

Ripple state:

We are actively working with trusted partners in the space to better understand the scope and scale of the problem.”

We are evaluating our approach to XRP volume reporting, including reviewing new options and requirements for sourcing market data.”

We are taking a more conservative approach to XRP sales this quarter.”

This conservative approach will however lead to lower reported sales of XRP in Q2 as compared with Q1.

Price problems?

This move by Ripple to try and address this inflation should be commended, but it will be interesting to see the effect it could have on the price of XRP.

The market is currently on the up, through Q1, and many companies and coins in the space will be reporting gains in Q2.

For investors to suddenly see a massive drop through Q2 for Ripple could be very off putting causing them to look elsewhere.

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About the author

Darryn Pollock is an award winning  journalist from Durban, South Africa. He picked up Vodacom’s Regional Sports Journalist Award in 2017 while expanding his Blockchain and cryptocurrency reach.  He is a contributor to Forbes, Cointelegraph, Binary District, and of course, U.Today. Darryn’s belief is that Blockchain technology will be the driving force of the next technological wave and it is the obligation of journalists and writers to tell its emerging story with integrity and pride.

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Bitcoin’s Domination May Rise According to One Analyst

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    Famous analyst PlanB published an interesting chart showing the four stages of Bitcoin’s market dominance. It appears that he predicts hard times for the altcoins!

Bitcoin’s Domination May Rise According to One Analyst
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With the last days of 2019 right around the corner, analysts and traders are getting the audience pumped for 2020 forecasts. The third Bitcoin (BTC) halving and Ethereum's probable migration towards its Proof-of-Stake (PoS) consensus will be hot topics for the crypto community. Prominent trader PlanB decided to surf this wave by showing BTC's dominating traction.

Four Stages for Dominance

In the historical chart, PlanB has revealed one of the most important indicators of the crypto world - Bitcoin's market capitalization. This indicator shows the ratio of BTC's market capitalization to the capitalization of all other cryptocurrencies tracked publicly by the available services (4000+ coins). This is used as a sign of comparative demand for altcoins and BTC.

Bitcoin Dominance Historical Chart
Image by: https://twitter.com/100trillionUSD/status/1203012308513017856

Plan B showed the four stages of BTC's dominance, in which the graph is slipped vertically (bottom line indicates 100% BTC market dominance). The first stage, which lasted before April 2017, showed that BTC's dominance was more than 90%. The second stage (April-September 2017) showed that the figures were between 70% and 90%.

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Bitcoin Dominance Reaches 55 Percent, Sets Its New High This Year

Bitcoin Dominance Reaches 55 Percent, Sets Its New High This Year

The third and the fourth stages repeated twice from September 2017 to the present day. In the early days of 2018, the indicator was at an all-times-low of 35%. Now, the graph is about to re-enter BTC's second stage with a 70+% dominance.

Altcoin Annihilation?

PlanB surrounded his picture with the ironic hashtag #altcoinannililation. Therefore, PlanB interpreted this traction as bad sign for the altcoins. It should also be said that some of commentators in PlanB's open thread suggest that the four-stage cycle was launched by the previous BTC halving of July 9, 2016.

Furthermore, we can see that BTC's high price correlates with its low market dominance. With that said, the publication by PlanB forecasts an extremely bearish start for 2020.

Recently, BTC advocate Tuur Demeester claimed that the price of BTC will drop one more time to $5,000. This level will be reached due to the capitulation of "weak" investors prior to the long bull rally.

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About the author

 Blockchain Analyst & Writer with scientific background. 5+ years in IT-analytics, 2+ years in blockhain. Worked in independent analysis (Crypto Briefing) as well as in start-ups (Swap.online, Monoreto, Attic Lab etc.)

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