2017 Crypto Giants: What Went Wrong in 2018?

Large-cap cryptocurrencies may have had a stellar 2017, but 2018 hasn't been so kind. Among crypto assets with over $1 billion in invested value, Ripple's XRP cryptocurrency may have been the biggest disappointment to newer investors, declining sharply amid heightened scrutiny after a period in which it became an industry darling.

The Rise and Fall of XRP

Entering January, it's safe to say investors were high on XRP. A key product for one of the most well-known industry startups, the digital asset won no shortage of favor from investors enamored by its goal of disrupting an oligopolistic global payments industry. The company provided fresh reasons for the interest: three of the top five money transfer companies worldwide were said to be implementing XRP in their payment flow systems. However, as the month progressed, optimism failed to keep XRP bid. A rumored listing on Coinbase never happened, and this, coupled with broader market weakness, weighed heavily. As of writing, XRP is changing hands at $0.89 – a figure down almost 80% from its record high.

Bitcoin Cash: A Fork in the Road

Bitcoin Cash (BCH), a fork of bitcoin, soared in Q4 2017 as investors took note of faster transaction speeds and low fees. Its surprise listing on Coinbase's GDAX exchange in December boosted its appeal, while cryptocurrency exchange CoinEx implemented BCH as its default currency in January. Still, it wasn't all green: BCH dropped 41.29% in January, possibly due to fears of stricter regulations in South Korea and China, the latter being a region from which it draws majority support.

Market Dynamics and Lessons

The 2017 rally was driven by retail frenzy and speculative mania, but 2018 brought reality checks. Regulatory uncertainty, exchange listing disappointments, and profit-taking contributed to the downturn. For XRP, the failure to secure a Coinbase listing was a critical blow, while BCH faced headwinds from regulatory fears in key markets. These events underscore the volatility and risk inherent in even the largest cryptocurrencies. Investors who chased gains in 2017 learned harsh lessons about the importance of fundamentals and market sentiment shifts.

1. XRP's decline was exacerbated by failed exchange listings and regulatory scrutiny, dropping ~80% from its peak.
2. Bitcoin Cash fell 41% in January 2018, hit by regulation fears despite strong Q4 2017 performance.
3. Market sentiment shifted quickly from euphoria to panic, highlighting crypto's extreme volatility.

Sources: CoinDesk