Cryptocurrencies have started the cannibalization phase, and it won’t end pretty. What we’ve seen in the past week is clear evidence of this. Bitcoin, which had reached nearly $20,000 now sits hovering between $12,000 to $14,000. Pretty good considering how much and how quickly it rose.
Yet, it appears, there is a new sheriff in town. Ripple (XRP) has risen to astronomical levels. Considering there are 100 Billion total vs Bitcoin’s 21 Million, the gains it has made means there has been unfathomable buying levels lately.
So, what is going on? I suspect we have entered the cannibalization mode. So-called alt-coins may overtake the value of Bitcoin soon. People flocked over to Bitcoin to hitch a ride on its monumental gains, however, others rode the wave on alt-coins. Unfortunately, however, we will now see a tug of war occur. As one currency falls, another will rise. The reporting has not been helpful. Articles such as this do not help the situation (and notably ripple has fallen at least 25% since that article according to coinmarketcap.com). Unfortunately, many will be misled.
Cannibalization. The currencies are going to eat each other. The daytraders are nothing more than profit chasers. Why would Ripple rise while others fall? Part of this may be the interest generated by articles here, here, and here, yet, it is also plausible that people are pulling money out of Bitcoin and other cryptos which are falling, and putting it in Ripple.
For me, I will sit on the sidelines and watch this play out. I think we could very easily see Bitcoin fall below $5,000 and even further as people realize there is better technology out there. This space is very volatile and the barriers to entry are low. No reason to get too excited about one coin over the other.