XRP that has been keeping its third place based on market capitalization for a long time now, has lost it to the popular USDT-backed stablecoin Tether (USDT). The digital asset has now slid to 4th place with a market cap of $4.4 billion, as per Messari.
This replacement has been the result of the extreme sell-off the market endured this week while Tether’s market capitalization surpassed $5 billion.
For the past month, the crypto market has been undergoing a downturn along with the stock market, bonds, and gold as the deadly coronavirus continues to spread.
On this achievement, Tether took to Twitter to announce, “This important milestone confirms Tether’s place as the pre-eminent stablecoin, with the biggest market capitalization.”
However, it was not just XRP’s price crashing but also a spike in interest in the stablecoin that saw it rising up. On March 14, the USDT balance on cryptocurrency exchanges climbed to an all-time high of 1,228,582,096.528 USDT.
Interestingly, Tether (USDT) at one point also beat the crypto king Bitcoin by becoming the most heavily traded cryptocurrency, about five times the digital asset’s trading volume.
And all this has been while the company is in the middle of a fraud investigation. The New York Attorney General’s office (NYAG) is investigating Tether and its sister company, Bitfinex, a crypto exchange, over allegations that it covered up the loss of $850 million. Tether is also fighting a class-action lawsuit of $1.4 million where it is accused of manipulating the price of Bitcoin during the 2017 bull rally.
Also, Tether’s claim of being “fully backed” by dollar reserves are only 74% true that further involves “other assets and receivables from loans made by Tether to third parties.”
The crypto market endured a massive and violent sell-off that saw Bitcoin losing more than 50% of its value in two days and XRP crashing to about $0.11. At the time of writing, XRP/USD has been trading at $0.152, currently in green but down 22.8% in 2020.
The crypto asset has lost 34% of its value in the past 7-days and according to veteran analyst Peter Brandt, XRP might be in the danger of free fall.
Another hit to the price of XRP and it could very well decline further. Already, the cryptocurrency is down 96% from its peak of $3.90, going straight up in early January 2018.
Another way to look at it Brandt says is that “almost everyone who has bought XRP since May 2017 has a loss. Now, that is an impressive performance.”
The analyst didn’t predict any price trajectory for the digital asset but says “XRP is not a true crypto,” and is “manipulated.”
Already, the extreme sell of the XRP and the passionate “XRP Army,” too much by many standards has Tiffany Hayden, who was once XRP’s staunch supporter recently sold all her holdings and disassociated herself from the community.
Just like Tether, Ripple is engaged in several court cases, in one of which the court ruled against the San Francisco-based tech company.
Ripple has been seeking to dismiss the claim that it violated California’s Unfair Competition Law (UCL) on the grounds that the plaintiff failed to show that he purchased XRP tokens “as part of an initiation distribution,” and that Ripple Labs qualified as a “seller.”
But the court ruled in support of the plaintiff’s claim that in issuing XRP tokens Ripple Labs acted as a seller however, the court didn’t support his allegations of misrepresentation under the California Corporations Code.