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Ripple CEO: Bitcoin’s influence over cryptocurrency prices is almost over | The Next Web

Since their inception, altcoin prices have mostly risen and fallen with the price of Bitcoin. According to Ripple CEO Brad Garlinghouse, those days are numbered.

“There’s a very high correlation between the price of [Ripple] and the price of bitcoin, but ultimately these are independent open-sourced technologies,” Garlinghouse told CNBC. “It’s early, over time you’ll see a more rational market and behaviors that reflect that.”

When trading in pairs, you’re making two transactions with each trade: buying one currency, and selling another. Buying XRP, for example, involved selling BTC, and then hoping it appreciated at a faster rate than the currency it was traded against (BTC).

For altcoins, this is problematic for a number of reasons. Most important is probably the correlation with BTC price on its underlying value. If BTC tumbles 20 percent, for example, there’s a good chance its trading pair will depreciate in value as well.

For what it’s worth, I believe Garinghouse is correct, but it’ll take direct-to-fiat trading pairs to make it happen. Once investors can purchase XRP, for example, and trade it against USD, its value will no longer be tied to BTC and its wild price swings. That won’t stop volatility, but it will ensure that rapid price swings are caused by activity related to XRP or the cryptocurrency market as a whole, and not just Bitcoin.

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Ripple CEO: Bitcoin’s influence over cryptocurrency prices is almost over.