Ripple Lab’s XRP token’s price seems to be plummeting at the speed of light, with the latest decline compared to two of the biggest collapses that were seen in the market in all of history. Crypto-focused research firm TIE’s Josh Frank said that the loss in the value of the cryptocurrency is far greater than what had been seen in the case of Enron, the defunct commodity trading giant. Almost $130 billion has been wiped out from the market capitalization of the XRP token from its all-time high of $140 billion that it had reached barely two years ago.
This decline of the cryptocurrency has been compared with the fall of some of the prominent financial institutions, such as the historic crash of Worldcom and Enron. Presently, the market capitalization of the token has fallen by 93%, which makes it decline far greater than those experienced by both Enron and Worldcom, as per Josh Frank. As a matter of fact, XRP’s collapse has been referred to as the third largest crash in the market’s history, only behind the bankruptcy-related fall of Lehman Brothers and that of Washington Mutual. The financial meltdown of 2008 had resulted in a great deal of turmoil for the financial sector and had caused a number of companies to go bankrupt, with Lehman Brothers and Washington Mutual topping the list.
The former suffered from losses worth $691 billion whereas the latter had filed for bankruptcy worth $327 billion, outpacing the crash of Worldcom that had occurred within a few weeks and had cost $103 billion. According to Frank, those who had invested in Ripple have already lost a huge amount of money while the founders of the company had dumped the token years ago, so they had already made hundreds of millions from it. The sudden crash of the token’s value only highlights the level of power that’s wielded by regulatory agencies.
The company as well as its token is suffering from these disastrous consequences after the US Securities and Exchange Commission (SEC) announced that it was filing a lawsuit against Ripple, along with its co-founder Chris Larsen and its chief executive, Brad Garlinghouse. A number of exchanges have already delisted the XRP token on their platform and the price of the token is crashing on a daily basis. Crypto exchanges, including names like Bitstamp, Coinbase, Bittrex, Cross Tower, OSL, OKCoin, and Beaxy have either opted to suspend the token temporarily, or have entirely removed it from their platforms.
Even before the exchanges too this decision, the price of the XRP token had already begun to move in the bearish direction, as holders had been unable to sell their funds. Its price fell even more sharply when exchanges decided to cut their ties. Apart from that, Ripple is facing a number of other issues, as institutional players have also started to withdraw from the token. For instance, Grayscale Investment has closed their investment into the XRP Trust and Bitwise has also shut it down for now.