Ripple (XRP) is the world’s second largest cryptocurrency by market capitalization (a title it regularly competes with with Ethereum), but new data suggests that Ripple’s market cap could be well below billions of dollars.
Ripple, the popular name for the digital token XRP, currently boasts a market capitalization of around $13 billion, however, crypto data firm Messari has suggested that Ripple’s market cap could be as low as $6 billion.
Ripple’s (XRP) trading supply is believed to be 41 billion according to CoinMarketCap.com, which tracks most major cryptocurrencies, but Messari reported that as many as 19.2 billion of them may be “illiquid or subject to significant selling restrictions” – suggesting that the Its quoted market price is completely different from its actual value.
Messari has proposed removing the Ripple holdings (XRP) of Ripple founder Jed McCaleb and RippleWorks, a California corporation affiliated with distributed ledger technology company Ripple, from major indices such as BloombergGalaxy, MVIS CryptoCompare and Bitwise 10 Large Cap Crypto Index, as well as passive funds such as Grayscale’s Digital Large Cap and Bitwise’s 10 Private Index Fund.
According to Messari, Ripple founders Arthur Britto and Chris Larsen could have similar selling restrictions on their multi-billion dollar allocation of XRP, although they did not include these restrictions in their analysis.
“sum, [these holdings] It means that 19.2 billion of the 41.0 billion XRP currently quoted as “in circulation” may be illiquid or subject to significant selling restrictions,” the report’s authors wrote.
In fact, this estimate may be conservative, as it contrasts with XRP trading volumes that have consistently fallen well below EOS and Litecoin, two crypto-assets with a current market capitalization of 17% and XRP 15%. Actual XRP “bound” in distributions to investors, banking partners, and team members may be significantly higher than our initial estimates reflect.”
A Ripple spokesperson said: “Not only does this report contain many inaccurate assumptions about closings and selling restrictions, the entire report is based on an incorrect calculation of market capitalization. While decentralized digital assets like XRP differ from traditional stocks, the term ‘market’ cap’ is always a very simple calculation: current price x total number of assets = market capitalization. This puts the current market value of XRP at around $31 billion. We believe that any other calculation of XRP market capitalization is not a clear representation of the truth.”
Messari also reported that “there could be significant and ongoing selling pressure in the XRP market depending on the length and structure of the selling restrictions placed on Ripple’s market-making partners, a Ripple affiliate, and the founders of Ripple, all of whom appear to have negotiated the price. Sales limits based on Exchange Trading Volume for XRP”.
According to Messari, Ripple has not shared the methodology or reference exchange data it uses to calculate the trading volume of XRP, which it says is an “important data point that drives selling restrictions.”
Messari found that more than 99% of XRP trading volume comes from offshore exchanges, which indicates that so-called “laundering trading” can be suspected, a form of market manipulation in which an investor simultaneously buys and sells the same financial instruments to create disinformation. , artificial activity in the market.
Ripple reported earlier today that the average daily volume of XRP was $585.7 million in the last quarter of 2018.
Ripple price has risen over a few months in 2018 Banks around the world have announced that they have been experimenting with Ripple’s technology to speed up and save money in international payments.
However, XRP has fallen more than 80% from its peak as most cryptocurrencies readjusted after the massive rally of 2017. Ripple’s price rose to over $3 in January last year, up from just $0.006 at the beginning of 2017.
Ripple’s price is now trading at just over $0.30, according to the latest prices from the CoinDesk tracker.