A crypto investment firm that’s returned 143% on its clients’ money in the past two years is shorting both Zcash and XRP.
Kyle Samani and Tushar Jain, Multicoin Capital’s co-founders, tell Forbes they think Zcash will be worth nothing in two years, citing the fact that other companies are copying its tech and only a slim percentage of the currency’s users actually take advantage of its privacy features.
They also think XRP, Ripple’s native currency, is too volatile for banks and large financial institutions to use, which they say limits its utility. And although they believe Ripple’s payment messaging system beats the status quo, they say there is no incentive for companies to move money using XRP.
They’ve been consistent in this view: Samani penned a column in 2017 arguing the bear case for XRP.
“XRP has two uses: to pay fees on the Ripple network, and as a ‘bridge currency’ for value transfers between any two institutions that don’t have a trusted relationship. However, its native token, XRP, is simply not necessary for the network to function…
[adinserter block="1"]The Ripple network is superior as payment rail system relative to the legacy financial infrastructure. However, it just doesn’t make sense that rational financial institutions will voluntarily use XRP as a reserve currency to settle transactions because XRP will always be – by definition – less liquid than a global reserve such as BTC.”
Ripple says it’s working to create an ecosystem where financial institutions can rely on XRP to move money across borders instantly, without having to pool money in separate bank accounts around the world. The company’s partner MoneyGram is the biggest user of its XRP-based liquidity solution and relies on it to move 10% of its daily US-to-Mexico volume.
Samani and Jain are bullish on Bitcoin and Binance Coin, and say they’re working to avoid tribalism in the cryptosphere. Says Samani,
“In the crypto community, these things are religious in some ways. They keep telling you, ‘Believe, believe, believe,’ forever. We never take it for granted that what’s being said is accurate.”
Multicoin Capital has raised $101.5 million in funding since February of 2019, according to Crunchbase.
[adinserter block="1"]Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any losses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any assets including cryptocurrencies, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.
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