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Cryptocurrency Market Erases Yesterday’s Gain, Ripple Drops 11%

Last Updated March 4, 2021 5:05 PM
Joseph Young
Last Updated March 4, 2021 5:05 PM

Yesterday, on March 6, the global cryptocurrency market moved closer to the $500 billion mark, as it peaked at $475 billion. Today, the market dropped by nearly $30 billion in value, as major cryptocurrencies recorded losses.

On March 5, CCN.com reported that the price of Ripple gained momentum due to unverified rumors which claimed Coinbase, the world’s largest cryptocurrency brokerage and wallet platform, will integrate Ripple this week. CCN.com’s report emphasized that if the unconfirmed rumors do not turn out to be true and Coinbase does not integrate Ripple, the price of the cryptocurrency could fall by large margins.

“This anticipation could also lead to a large drop in the price of Ripple if Coinbase ends up not integrating Ripple, as it did last year, when similar rumors emerged. It is unlikely that Coinbase will integrate Ripple this week, given that it is still dealing with class action lawsuits regarding insider trading allegations against Coinbase employees,” CCN.com reported.

Over the past 24 hours, almost immediately after Coinbase released an official announcement that clarified the company’s plans to not add any new asset on the Coinbase trading platform or GDAX in the short-term, the price of Ripple fell by more than 11 percent.

The official statement of Coinbase read, “our January 4th, 2018 statement continues to stand: we have made no decision to add additional assets to either GDAX or Coinbase. Any statement to the contrary is untrue and not authorized by the company.”

Ripple’s price peaked at 1.08 percent on March 5, recording a staggering 20 percent increase in value. As of March 6, the price of Ripple remains below 0.92.

On January 4, Coinbase released a statement entitled “Our process for adding new assets” after a flurry of rumors emerged, which falsely claimed that Coinbase was planning to integrate Ripple. The price of Ripple spiked by more than 20 percent during that week, similar to this week.

At the time, the Coinbase team wrote,  “a committee of internal experts is responsible for determining whether and when new assets will be added to the platform in accordance with our framework. These individuals — and all employees at Coinbase — are subject to confidentiality and trading restrictions,” emphasizing that the company is more cautious in adding new assets and strict in sustaining confidentiality regarding new cryptocurrency integrations.

Buying rumors or trading based on unconfirmed news can be extremely risky. If the rumors don’t turn out to be true, and in most cases they don’t, traders can experience a significant drop in the asset they invested in.

Market Recap

Bitcoin, Ethereum, Bitcoin Cash, Litecoin and Cardano, five of the largest cryptocurrencies in the market apart from Ripple, have also recorded around 4 percent decline in value on average, as the market fell by over $30 billion.

Other smaller cryptocurrencies like Ziliqa, Factom, Nano, and Ethereum Classic experienced major losses, with Nano and Ethereum Classic dropping by more than 12 percent.

In the futures market, short positions targeting major cryptocurrencies like bitcoin and Ethereum have been opened, and many long positions have been closed.

Featured image from Shutterstocck.