This week has begun with a major change in terms of the bigger coins in the cryptocurrency space as the top three is not what it was last week. For the longest time, Bitcoin has been on top, Ethereum in second with a few challenges from Ripple, but now Tether’s USDT has overtaken Ripple’s XRP to sit third with a market cap of $8.77 billion compared to XRP’s $8.56 billion.
This move is a major one because USDT is a stablecoin, and a major one at that. This means that the value of Tether is — or should be — backed by US Dollars and the market cap is not determined by rising prices, rather by minting new coins. More so, the minting of stablecoins to make Tether reach this position is a new thing too.
Stablecoins have gotten a boost since the mid-March market collapse as the minting of a number of coins hit a boost in order to put more money into the lagging cryptocurrency market, and because the value of stablecoins in a time of high volatility was also realized.
For XRP, this is not a good sign though as the cryptocurrency purported to be a new way for inter-banking transfers to happen is under pressure in terms of its growth. XRP has faced a few controversies of late with the community accusing the company of making market dumps, and threats of a fork.
Ripple in trouble
Tether may have overtaken XRP in terms of market cap, but the stablecoin has been showing far more usage and importance than XRP for a long time. Looking at May, the trading volume seen in USDT has been 25 times more than XRP.
XRP’s market cap has also been caught because it has been rapidly falling. Its market cap has collapsed from a high around $130 billion in January 2018 to the current one under $9 billion. At one point XRP was jockeying for the number two position with Ethereum, however, currently, the combined market cap of XRP and USDT is still $5 billion behind Ethereum.
Most of the news and information around Ripple has been less than positive as even its big money take over of MoneyGram has proven to be a little weak in the middle as it appeared that the crypto company was floating MoneyGram with XRP injections.