It's getting worse for the crypto asset known as XRP. After an extremely poor performance in the past two years, the recent Crypto crash has caused Stablecoin Tether's market cap to "flip" the previously third-placed cryptocurrency Ripple.
Tether drops XRP as the third-placed cryptocurrency, flipping is official
XRP has built a negative cryptocurrency reputation for several reasons. The asset is among the worst in two years in a row, and some die-hard crypto evangelists claim the asset isn't central enough to stand alongside Bitcoin and Ethereum.
However, the recent crash of the crypto market has led to a stronger separation between XRP and Bitcoin and Ethereum. The controversial stablecoin tether now stands between the two best crypto assets and XRP.
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Tether is used by cryptocurrency investors and traders as a safe haven for capital during downturns or particularly turbulent volatility. This fiat-linked stall coin keeps capital consistent and isn't exposed to the wild swings of top crypto assets.
Thanks to yesterday's Crypto Drop, Tether Ripple officially flipped
Tether Offer: $ 9.018 billion
XRP market cap: $ 8.617 billion
– Alistair Milne (@alistairmilne) May 22, 2020
After several years of bear market conditions, Tether's market cap has risen to almost $ 9 million due to high demand, while XRP's market cap has steadily dropped to below $ 8.8 billion.
While only about a million dollars separate Tether and XRP from one another and the two will likely keep changing places for some time, the fact that Tether has overtaken the third-placed crypto assets shows the sad state of the crypto market in which it is located.
Data from CoinGecko
The bear market ripple effect keeps stable coins in high demand and old coins in danger
After several years of the downward trend, interest in altcoins has not yet returned. Most of the reviving interest in cryptocurrencies is directly related to Bitcoin.
Much of it was fueled by halving the asset, its similarity to gold, and its potential use as a hedge against hyperinflation. Altcoins weren't so lucky.
All of this can change quickly as the illiquid assets have been oversold for a long time and Bitcoin profits could flow into the alternative assets.
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This could cause XRP to recover soon and take back third place, but Tether is unlikely to be too low on the list of top crypto assets.
Although much of the tether demand is due to falling crypto prices, stablecoins have become an increasingly popular way to transport funds in cyberspace at low cost. It's also a stable way to store value digitally, making it far more valuable than just a safe haven for capital when crypto prices crash.