and Litecoin have all experienced huge losses this year, and a lot of people are blaming Bitcoin for this. Despite the fact that Bitcoin has also been performing badly this year, it is unfair to say that it is the driving force behind the other price drops.
There are in fact, two likely reasons that the above mentioned cryptocurrencies are plunging, and neither are them are caused by Bitcoin.
The competition has widened considerably. Last summer there were 900 cryptocurrencies available to investors. In less than a year, this number has dramatically increased to 1,650, and what is more, nearly all of them are accompanied by their own blockchain technology. On top of this, well known brands, such as IBM, have started their own blockchain technology as well. The trouble is, and this is why it is affecting the price of older cryptocurrencies, is that the new virtual currencies are looking at what needs improving of the older, more mature cryptocurrencies and evolving theirs to be a newer, more improved version, which is creating much more competition and fewer people are choosing Ripple, Ethereum and Litecoin as an investment option.
The second issue can be put down to the proof of concept that is affecting nearly all cryptocurrencies. The three cryptocurrencies that we are looking at have done a pretty good job of branding their blockchain technology and tokens, and as a result have made countless partnerships. The Enterprise Ethereum Alliance had 200 member organisations since October, which is testing a version of their blockchain across a number of different industries. In less than 2 years, Ripple had landed 5 brand name financial partners, and finally, Litecoin’s average daily transactions have been steadily climbing.
However; the problem is that most cryptocurrencies
are testing their platforms in small scale projects and demos. This is making people feel uncomfortable as they are unsure of how they will perform on a large scale, which has caused the value to decrease.
Featured Image Source: Pixabay