Gerald Ratner caused a crash in his stock back in 1991, when he referred to some of his products being “total crap”. His affordable-jewellery company’s shares lost $500m in a couple of days.
The episode gave rise to the phrases “the Ratner effect”, and “doing a Ratner”, to describe what happens when people undermine the value of the precise thing they’re trying to sell.
Fast forward 27 years — yes, terrifyingly, that’s how long it has been — and we find ourselves in the magical world of crypto, where the Ratner effect doesn’t seem to exist at all.
Take Dogecoin, for example, the jokecoin whose founder has repeatedly said its price — and those of other cryptos — is unhinged from reality. Dogecoin’s current total value is estimated at a third of a billion dollars.
And then came a story yesterday by Anna Irrera at Reuters:
Banks are unlikely to use distributed ledgers to process cross-border payments for now because of scalability and privacy issues, according to Ripple, one of the most prominent startups developing the technology.
“I will concede, we haven’t gotten there yet,” Ripple’s chief cryptographer David Schwartz said in an interview.
Ripple, the company behind centralised digital token XRP, exists to create a system for payments for banks.
At pixel time, XRP was up 3.6 per cent on the day.
Blockchain insiders tell us why we don’t need blockchain – FT Alphaville
Sell all crypto and abandon all blockchain – FT Alphaville
The Ripple effect – FT Alphaville