The head of the Ripple brad Garlinghouse said may 30 in Power Lunch CNBC that the situation when the prices of cryptocurrencies are correlated with the price of bitcoin may soon change. According to him, it will happen when the markets will begin to recognize the difference between the assets. In particular, Garlinghouse said:
There is a strong relationship between the price of XRP and the price of bitcoin, but they ultimately represent the independent technology based on open source code. While the time has not come, but in the future we will see a more rational market and behavior of its participants, reflecting the rational nature.
Ripple head office is located in San Francisco. The company develops more effective (compared to existing) global system of financial payments. With XRP, the digital token Ripple, financial institutions can carry out high-speed transactions in the network.
According to Garlinghouse, in the first quarter, the company has demonstrated record performance contracts with 20 new partners. May 30, the company announced a deal with the largest Bank in Kuwait. Thus, the list of companies that test XRP for cross-border payments (this applies MoneyGram), added.
However, during the same first quarter of the token XRP has lost 70% of its value and demonstrated the worst performance among the leading digital currencies. In the first quarter affected the entire sector: the market capitalization of cryptocurrencies has fallen by more than 50%. Bitcoin price also dropped by around 50% over the past three months.
Arlinghaus commented on the situation on the market in the following way:
This sector is still in the development stage, and trade is mainly speculative. I think people need time to understand the different usage scenarios.
According CoinMarketCap.com currently in circulation are 1500 cryptocurrencies. The head of the Ripple is predicted that 99% of these digital assets will disappear over the next ten years:
In the development process there will be some correction, when many players in the sector, the assets of which do not solve real problems, will be forced to leave the stage.
Some cryptocurrencies have proven use cases and become purely a way to cash in on investors. Recently, the American Commission on securities and exchange Commission (SEC) has warned users against the schemes of pumping and dumping, has closed a number of ICO and accused the project is involving a former boxer Floyd Mayweather and hip-hop artist DJ Khaled fraud.
Arlinghaus said about these steps, the controller:
SEC fulfills its mission, because fraudulent episodes actually take place. We have always advocated government regulation. The government should protect investors and companies, however, there are projects that bring real practical benefits.
The main problem faced by regulators is the question of the nature of cryptocurrency, which some consider a security, while others deny her that status. In March, the head SEC Jay Clayton explained the position of Department headed by it, saying that all token-ICO — are securities. However, Ripple believes that cryptocurrency XRP should be classified differently. In particular, Arlinghaus indicated a number of differences between XRP and classic securities, such as market shares:
Owning XRP, you don’t have the rights to dividends of the company. But XRP have real usefulness.