Ripple publishes the quarterly XRP Markets Report to voluntarily provide transparency and regular updates on the company’s views on the state of crypto generally including the XRP market, such as quarterly sales updates, relevant XRP-related announcements and commentary on previous quarter market developments.
As an XRP holder, Ripple believes proactive communication and transparency are part of being a responsible stakeholder. Moreover, Ripple urges others in the industry to build trust, foster open communication and raise the bar, industry-wide.
There was no shortage of events that were reported to contribute to market volatility in Q2 — notably ransomware attacks, environmental concerns, Elon Musk’s tweets and regulatory scrutiny, among others. The second quarter of 2021 saw significant increases in crypto market capitalization followed by a steady decrease. During the larger market period, which lasted 396 days (Feb 2020 – April 2021), total crypto market capitalization increased 15-fold. However, beginning April 22, prices eventually decreased by over 20%.
Some countries took sweeping action firmly supporting or denouncing the use of cryptocurrencies. On one hand, El Salvador passed a law making bitcoin legal tender, making it the first country to do so. Chinese regulators, on the other hand, reportedly shut down mining operations across the country citing concerns over environmental impact and tightened restrictions on financial institutions from providing crypto-related services. These actions resulted in a drop in hashrate and increased bearish sentiment.
Although the jury is still out on whether “price follows hashrate” or “hashrate follows price”, there is correlation between the two. During the most recent bear market, bitcoin’s hashrate dropped 50% from its highs which correlated to the decrease in bitcoin price over the period.
Finally, markets were also impacted by growing fears of inflation. Just in June, the U.S. consumer price index increased 5....
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Insights – Ripple