CONCERNS ABOUT RIPPLE MOUNTS
In the past few days, Ripple’s price against the dollar has remained unchanged. Partly, this is because of new concerns about the currency and its valuation.
Some financial experts have continued to question Ripple’s listing alongside bitcoin and ethereum. Their argument is that its technology is not decentralized unlike that of other cryptocurrencies. As such, having a centralized platform makes no sense for its claim to be a blockchain platform. For miners, there is no method of mining the ripple ‘coins’.
Multiple people like Jens Bader, a successful cryptocurrencies trader and founder of a company called MuchBetter have raised these concerns. Recently, he said:
“It might be a good complimentary currency to bitcoin and ethereum, but since it is a centralised system, it does not live up to the brief of what a cryptocurrency is meant to do, and the USPs of blockchain technology.”
Remember, Ripple has a different role than bitcoin. Its main role is to ease cross-border settlement among financial institutions. On its part, bitcoin is positioned as a digital currency, which people can use to make transactions.
Therefore, given its centralized system, some have argued against its valuation. According to Coinmarketcap, Ripple is the third largest ‘cryptocurrency’ with a valuation of more than $51 billion.
In the just released ratings by Weiss, Ripple received a C-rating which is similar to that of bitcoin.
As shown below, Ripple is currently trading at 1.3040 level. At this level, it is at the apex of a symmetrical trading pattern, which means that a breakout can happen in either direction. It is also trading at the same 50 and 14-day moving average. All this is an indication that the pair could go in either direction.