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The founder of Quantum Economics, Mati Greenspan, is outlining why he believes XRP struggled throughout 2019.
XRP’s correlation with Bitcoin dropped significantly this year. At time of publishing, BTC has surged 48% since January 1st, from $3,739 to $7,303, according to CoinMarketCap. Meanwhile, XRP has dropped 44%, from $0.3520 to $0.1942.
Greenspan says Ripple’s routine sales of the third-largest cryptocurrency by market cap have prevented the price from rising. He also points to the fact that the majority of Ripple’s 300-plus clients are currently using the company’s payment messaging software and are not utilizing XRP.
“The two main issues…
1. Ripple holding a large portion of tokens and selling into the rallies.
2. Usage of the network does not necessarily require XRP tokens. Banks can use RippleNet without ever touching the token.”
The San Francisco startup, which owns more than half of the total supply of XRP, says its XRP sales are too small to impact the price. Ripple sells XRP to institutions over-the-counter and on crypto exchanges at 10 basis points of the overall XRP volume.
The company slowed its sales in recent months after adjusting the way it measures the total amount of XRP being sold on crypto exchanges. In its third-quarter XRP Markets Reports, Ripple said it had stopped selling XRP on crypto exchanges altogether.
“In fact, part way through Q3, we decided to pause programmatic sales altogether, and focus our over-the-counter (OTC) sales on a few strategic partners, who are building XRP utility and liquidity in regions that are strategically important to our growing global business, including EMEA and Asia.”
So far, the company has not revealed whether it sold XRP on crypto exchanges in the fourth quarter of this year.
Ripple is also reporting rising XRP volume on its enterprise payments product ODL, which uses XRP to move money across borders.
“Ripple customers live with ODL, including MoneyGram and others, increased by 75% last quarter and dollar volume on ODL increased more than five times from Q2 to Q3.”
Despite his critique, Greenspan says he thinks ODL will have a positive impact on the digital asset in the long run.
[adinserter block="1"] [the_ad id="42537"] [the_ad id="42536"]Hi Eri. All valid points, which is why I'm long term bullish. ?
— Mati (@MatiGreenspan) December 30, 2019
