Why are XRP and XLM so cheap?

Why are XRP and XLM so cheap?

By MadMaxx | Psycho Crypto | 30 Apr 2020

Yesterday, at the close of the markets, I headed over to twitter to check out what was happening with the world.

I saw that a group of people called "the XRP army" were saying that the BTC pump would be the fire under the pot of XRP and XLM to pump them to oblivion.

They said that XRP would be eventually worth $100, and that they'd all be rich and drive lambos and run over all the XRP haters.

And while it's great to want to become rich and crush your enemies, it most likely won't happen because you bought XRP. Mostly because it won't be able to get to $100. Ever.

Here's why XLM and XRP are so cheap.

Despite all the amazing features that both cryptocurrencies bring to the table, XLM, as well as XRP are both dirt cheap. A middle schooler could buy a bag with his lunch money and still have money for lunch.

Why is this so?

Simple. Tokenomics.

The reason why BTC is so expensive is because there's a limited number of it that will ever be created. 

Everyday, the asset becomes more and more scarce, as people buy it and hodl it in their wallets.

But on XRP's side, the reverse is the case.

There are billions of tokens already in the market, with billions more to come. Whole this is so banks and users can have an unlimited supply of it for transactions, it also hurts the price a lot. 

Even if everyone who buys XRP holds it, there would still be more tokens injected into the market the next day, and the next month.

And to put things into perspective, if there are 1 billion XRP in existence, and they cost $100 each, their market cap would be higher than the trading volume of the Forex and NASDAQ put together. That's not going to happen anytime soon.

But many XRP holders argue that this isn't so, because it isn't the case with Ether.

And yes, while Ether is to be printed indefinitely, there is a slowdown in how much is injected into the market. This, coupled with the amount of it stored up by Blockchain banks like MakerDAO, and being lent out on Compound, along with all the DApps and intrinsically valued cryptocurrencies that run on the ERC-20 protocol, ETH will be worth a lot more in the future even.

If I were to be realistic, and I am, I would advise XRP bulls to think towards making XRP cost at most $1. That in itself is a very crazy aspiration, mostly because of the resultant market cap.

That's why they're not worth so much.

Thanks for reading! And don't forget to pick up your free Bitcoin here. Thank me later!

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In the eternal quest for crypto fulfilment. I'm an obese frog on the internet, what I say most definitely isn't financial advice.

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