The decision provoked a wave of anxiety on the cryptocurrency market, which led to a dramatic decline in the price of main digital currencies, including bitcoin and ripple.
The most popular website for cryptocurrency pricing data announced on Monday it removed data from three South Korean trading platforms, citing “extreme divergence in prices from the rest of the world and limited arbitrage opportunity.” The exchanges omitted include Bithumb, which is the second biggest platform in the world, Korbit and Coinone.
This morning we excluded some Korean exchanges in price calculations due to the extreme divergence in prices from the rest of the world and limited arbitrage opportunity. We are working on better tools to provide users with the averages that are most relevant to them.
— CoinMarketCap (@CoinMarketCap) January 8, 2018
The move caused some panic selling on the market, resulting in a drop of all cryptocurrencies, especially those with large trading volume in South Korea. The market cap of all digital currencies demonstrated a sharp decline shortly after the decision was put into force by CoinMarketCap.
Ripple (XRP) seems to have been influenced the most, as it lost more than 30% in value. The cryptocurrency’s price decreased to $2.50, while its total market share fell by $20 billion to less than $100 billion.
Ripple’s chief cryptographer, David Schwartz, commented:
They are outliers due to a shortage of cryptos in Korea and difficulty getting KRW out. The new price is more accurate and meaningful, IMO.
— David Schwartz (@JoelKatz) January 8, 2018
The decline has also pushed Ethereum higher, which regained its second position on the CoinMarketCap chart. This is just a week after Ripple rose to a second place on the crypto market, partly due to an increased trading volume on South Korean exchanges. Market leader bitcoin also slipped on the news, falling below $15,000 mark on Monday.
XRP is currently trading at $1,91, as CoinMarketCap shows, with its market cap amounting to more than $74 billion. Bitcoin and ethereum, meantime, are worth $13,405 and $1,150, according to the website.
XRP, the virtual currency based on the Ripple blockchain payment system, was developed to facilitate cross-border payments between institutions. Yesterday, the company announced a new collaboration with international money transfer giant MoneyGram to test the use of XRP for global payments.
Under the partnership, the tokens will be used through xRapid, a new Ripple service created to provide liquidity to financial institutions. The trial will show XRP benefits, such as an ability to reduce costs and improve efficiency of international money transfers.
According to the press-release, XRP is now the most efficient digital asset with transaction fees much lower than those compared to bitcoin fees. The XRP transaction takes on average 2-3 seconds to complete, while other top digital assets take from 15 minutes to one hour.
“The inefficiencies of global payments don’t just affect banks, they also affect institutions like MoneyGram. Money transfer companies are incredibly important because they help people get money to their friends and loved ones,” said Ripple CEO, Brad Garlinghouse.
“We are excited about this pilot and a long-term strategic partnership with MoneyGram. By using a digital asset like XRP that settles in three seconds or less, they can now move money as quickly as information.”