There is no doubt that the XRP cryptocurrency has a dedicated fan base; devil, the cryptocurrency community has rightly marked the supporters of the " XRP Army" asset . But altcoin also has so many skeptics who think the asset is inherently worthless, like the way some people view Bitcoin as an asset really worth $ 0.
As previously reported by PassionCrypto , a crypto derivatives trader has noticed that the macro price chart for XRP looks strangely like the charts for tech companies that have exploded in recent decades. Referring to the similarities of the graphs below with those of cryptocurrency, he noted:
"Here are some of the hundreds of 10-year charts you can find for" promising technologies. " Do you see a similarity? Many of these same charts have forums of people who are still talking about the coming recovery. "
Cantering Clark Trader Charts
This means that he would not be surprised to see assets plummet even lower over time, even after dropping more than 90% from their historic high.
This was echoed by prominent commodity trader Peter Brandt, who recently noted that the asset was a “manipulated scam” en route to $ 0. (By the way, Brandt is a Bitcoin maximalist who seems when it comes to his involvement in crypto.)
But according to an industry investor, there is an explanatory reason why the XRP is worth $ 9 billion (market capitalization according to CoinMarketCap) and could continue to maintain this valuation in the future.
How is XRP still so valuable?
Jason Choi - investor at The Spartan Group and formerly Bridgewater Associates, the world's largest hedge fund - published a large Twitter feed on illiquidity in the altcoin markets on June 4.
While the research focused on altcoins small room outside the top 30 - Choi specifically mentioned the SNX of Synthetix , the ZRX of 0x and KNC of Khyber Network - he stressed how illiquidity and inefficiencies altcoin the market have affected the ratings of litecoin and XRP .
(He has personally made no comment on the assets, but noted that there are analysts who have strong opinions.)
While criticism is not warranted, the two cryptocurrencies are often marked as the coins that least deserve to be in the top 10 of digital assets by market capitalization.
Choi explained that due to the lack of volume and depth in the order books, "bottoms or whales" may not want to get involved in the markets, which means that price discovery can be catalyzed by smaller market players. And with such a solid group of retail investors backing the XRP , prices can be relatively high compared to what leading analysts think it is worth.
"The funds or the whales do not want to get involved with little traded tokens because of the slippage, and if the liquidity does not improve, they are blocked ... I suspect that this may also be the reason why some think that assets like XRP and LTC are overvalued, they continue to get a multi-billion dollar valuation. Price discovery has occurred; the market simply disagrees with you. “
Price still falling
While the XRP market can maintain a multi-billion dollar valuation, that does not mean that assets do not tend to decline over time.
Brandt shared the chart below in March, noting what it looks like as if there was no macro price support for XRP in the current lineup. Referring to how the asset could sink lower without catching an offer, he noted:
"I'm breaking a promise. I said I would never publish an XRP graph again . But, I thought you might all be interested in what it means to have "white space underneath". "
Trader Peter Brandt's XRP Price Table
Adding to the expectations of the decline is cryptocurrency inflation.
According to Florent Moulin - who is part of the research and products team of the cryptographic research company Messari -, the inflation of XRP's circulating supply in the past 12 months has been 20%. It's five times that of Bitcoin before half, and 10 times that of BTC after half.
The large quantity of XRP launched on the market could depress its action on prices compared to other cryptocurrencies, Moulin strongly suggested by writing the following with reference to inflation data:
“Only 30% of the XRP max offer was distributed, compared to 87.5% for BTC . The BTC is up 20% since last year, the XRP is down 47%. "
Kyle Samani of the prominent Multicoin Capital crypto fund (which has been publicly short / bearish on altcoin) corroborated this story.
He told Bloomberg last year that the fact that so many XRP's were put on the open market by Ripple and related parties was likely to lead “savvy investors” to sell the cryptocurrency.
