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Why Dogecoin, XRP, and Polygon Are Plunging Today

Why Dogecoin, XRP, and Polygon Are Plunging Today
Written by publisher team

What happened

Altcoins were undergoing a major correction on Monday with big names like Dogecoin (CRYPTO: DOGE)And XRP (CRYPTO: XRP), And ribbed (CRYPTO: matic) It is down 11.07%, 12.58% and 11.28% on heavy volumes in the past 24 hours as of 11:45 AM ET. Those coins at the time were trading at $0.21, $0.93 and $1.19 respectively, as the sector once again suffered from fear, uncertainty and doubt.

Over the weekend, US regulators said they were investigating Binance, the world’s largest cryptocurrency exchange, over allegations that it was exploiting customers via insider deals. Binance has facilitated nearly $32 billion worth of trades in the last 24 hours.

On Sunday, European Central Bank President Christine Lagarde delivered another punch With a caveat, altcoins are described as “highly speculative” and “suspicious”.

In addition, cryptocurrencies are trading alongside the overall stock market, which was trending lower on Monday due to the crash Chinese Evergrande Group (OTC: EGRN.F), the second largest real estate developer in that country. As of mid-afternoon on Monday, major US indexes were down between 2.5% and 3.6%. Evergrande is said to owe creditors more than $300 billion and is liquidating homes at rock-bottom prices as part of its efforts to raise money to pay off its debts. The current situation highlights the idea that cryptocurrencies are not a hedge against stock market risks. Instead, they are up to 10 times more volatile than stocks, with shorter bull market cycles.

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so what

Among these coins, Dogecoin is the most at risk of further declines due to its high volatility and tendency to attract scrutiny from regulators. This is due to the large number of influencers and celebrities on Instagram who abuse the meme, either randomly or in coordinated attempts.

Meanwhile, Ripple Labs, the developer behind XRP, has been in a legal battle with the Securities and Exchange Commission (SEC) since December. The SEC claims that Ripple Labs’ coin offerings constituted unregistered offerings of securities. So XRP investors are very sensitive to any negative regulatory developments in relation to cryptocurrencies on a large scale.

Finally, the India-based “internet of blockchains” tokens aren’t doing very well either. The developers had hoped to bring the crypto-currency technology of that country to the world stage. However, the State Bank of India recently banned the flow of funds from cryptocurrency exchanges on its payment platform.

What now

As scary as all of this sounds, it is important to understand that none of these issues will be “final blows” to the burgeoning crypto industry. For example, the collapse of a large company such as China Evergrande Group will likely prompt the Chinese government or its central bank to speed up the rescue plan. As for Binance, it is only facing a regulatory inquiry; He. SheNot under criminal investigation. Moreover, it will be difficult for regulators to take action because their servers are not located in the US

Things don’t look so desperate for altcoins either. All the big names talking about Dogecoin have done more than increase its price – they have increased its core value. In fact, more than 1,600 merchants around the world now accept Dogecoin as a payment method.

As for XRP, its developers and lawyers have decided to go to the Securities and Exchange Commission (SEC) and refuse to settle the case against them. It is clear that XRP does not want to set a precedent as crypto developers issue coins or tokens to raise funds, threaten legal action by the Securities and Exchange Commission, and force them to pay.

In some ways, the regulator has no advantage here. SEC President Gary Gensler said his agency is underfunded and linked to more than 6,000 projects. Meanwhile, XRP has grown to a market capitalization of over $44 billion. At the very least, the Agency is caught in a war of attrition in which it will have to devote ample time and resources to winning.

Finally, Indian investors interested in buying Polygon have found clever ways to bypass State Bank of India regulations. Up to 60% to 80% of all transactions take place via decentralized exchanges or peer-to-peer trading, compared to just 10% to 15% a year ago. Overall, the industry is recovering quickly despite the latest round of crackdowns. Don’t sell unless you need the cash now.

This article represents the opinion of the author, who may disagree with the “official” recommendation position of the Motley Fool Premium Consulting Service. We are diverse! Asking about an investment thesis — even if it’s our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

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