Analyst, Mati Greenspan sees the XRP price continuing to struggle in the short term due to Ripple sell-offs, and the fact that financial institutions don’t need the token to access the benefits of the Ripple network.
Yes. XRP tokenomics is a bit funny that way. 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 w/o ever touching the token. https://t.co/oDM2dO1vhV
— Mati Greenspan [not trading advice] (@MatiGreenspan) December 29, 2019
2019 Has Been A Tough Year For XRP Token Holders
In a tweet aimed at addressing concerns over price, analyst, Mati Greenspan laid out his opinion on why positive news seemingly drops the token price.
The question is a valid one, especially considering that XRP has arguably the strongest use case and a significant number of partnerships. The quantity and quality of which tower above that of other projects.
At last count, Ripple partners spanned the categories of banks (which make up the majority at 118), remittance firms, foreign exchange companies, cryptocurrency exchanges, payment providers, software companies, and miscellaneous entities, which total 168 in number.
But 2019 has been a disastrous year for XRP, being the worst performing of the top 10. And many stalwart holders of the crypto token are questioning whether things will get any better.
The Problem With Ripple
And according to Greenspan, in the short term, at least, the answer is no. That’s because he sees “XRP dumping” as a major source of revenue for Ripple and something that will continue as it profits the company.
Indeed, Ripple’s latest market report showed that during Q2 2019, the company sold $251.5 million worth of XRP. And the next quarter also saw a sell-off to the tune of $66.2 million.
However, the report made mention of the accusations leveled at Ripple. It cited the deliberate spreading of misinformation by representatives of rival cryptocurrencies. And most of all, it set to assure token holders by saying the company has a vested interest in the success of the token. As such, downplaying any notion of the project being a pump and dump scheme.
“XRP exists independently of Ripple. The XRP Ledger is a free, open-source, decentralized technology. Others can and do develop on it and use it. If Ripple went away tomorrow, the Ledger would continue to exist and XRP would continue to trade.”
In addition, many senior executives, including Brad Garlinghouse himself, have come out to address “XRP dumping” directly. Only yesterday, Ripple CTO, David Schwartz said the effects of selling were negligible. On top of this, selling the token isn’t even the primary source of income for Ripple.
Nobody buys XRP to give Ripple money to do things. We were vc/angel funded and were going to build regardless. We started selling XRP only after there was a market price and for negligible amounts compared to our other funding.
— David Schwartz (@JoelKatz) December 29, 2019
Is XRP A Security?
Having said that, Ripple partners can still benefit from using Ripple products without having to buy XRP. That being so, why would anyone bother?
The most popular product, xCurrent, is an international real-time settlement system. It enables users to send messages to clear and settle cross border transactions. All with the advantage of greater speed over SWIFT, which typically takes days to settle.
In this messaging system, XRP is an optional add-on, which allows for cheaper and faster settlements over fiat-to-fiat pairings. However, settlement can still occur without using XRP.
And the main problem here is that typically conservative banks are reluctant to get involved with XRP when the SEC has still not ruled on whether it is a security, or not.
Should the ruling go against Ripple, the fallout would be dire for XRP. As the taxation and legal implications of trading securities would wipe out any benefit of using XRP in the first place. Ripple would also likely face severe financial penalties for selling an unregistered security.
While no-one can predict what the SEC will rule, data specialist, Arjun Govind has analyzed XRP in accordance with the Howey test and concludes that XRP is indeed a security.
“The Howey test indicates that since capital gains would be the direct consequence of an identifiable third-party (Ripple, in this case), it must be classified as a security.”
As such, Greenspan is right to point out that companies can benefit from Ripple products without using XRP. But the underlying issue is much deeper, and one that deadlocks the token until a ruling is made either way. The post appeared first on NewsBTC. origin »
Bitcoin price action over the last few weeks as turned from bullish, to bearish, and crypto investors are torn as to what happens next. Most expect Bitcoin to go on a bull run from here, while others think a correction until the end of the year is in the cards.
Market analyst Jesus Rodriguez believes that investors should consider blockchain datasets when devising their Bitcoin investment plans. Blockchain data helps with crypto investing On August 12, Invector Labs chief scientist, Jesus Rodriguez, took to Hackernoon and made his case as to why he believes Bitcoin remains bullish despite correcting from $13,800.
Following many months of consistent downturn, Bitcoin has finally been able to form its first green candle on its monthly chart. Despite this, BTC is continuing to trade sideways today, and has continued to struggle to break above $3,900 after experiencing increased levels of volatility last weekend.
Todd Gordon, a long-time stock analyst and the founder of TradingAnalysis. com, is “nervous” about the current state of the S&P 500. The index crashed just before Christmas to below 2350, but has affected a steady recovery in the meantime.
Bitcoin Will Struggle To Break $4,300 It isn’t a secret that the broader crypto market has struggled in recent months. After posting close-to-zero gains, or losses during the summer months, Bitcoin (BTC) began to plummet, quickly falling under $6,000 to $5,500, then $4,500, and all the way down to $3,200 in mid-December.
Just in the past two months, Bitmain has fired more than half of its staff, has closed an entire office in Tel Aviv, has shuffled top management, and removed two of its chief operations officers. And today, the Chinese bitcoin mining giant decided that it would close another overseas workplace – this time in Amsterdam.
While bears continue to tighten their grip, the primary story is no longer about price charts. Market players now want to know where funds are moving. This has been among the key indicators for detecting potential sentiment shifts amid broader market uncertainty.
The cryptocurrency market recovery has stalled over the past few hours, with Bitcoin failing to overcome the $93k resistance level. Ripple (XRP) is trading under pressure at press time and risks dropping below the $2 psychological level if the bearish trend persists.
Cryptocurrencies remained downbeat on Friday, December 5, with sentiment deteriorating across leading assets. Meanwhile, the latest ETF flow stats confirm this weakness, with Bitcoin and Ethereum exchange-traded products struggling as new products attracted fresh funds.
Ripple (XRP) seems to have lost steam after recording gains over the past two days. The second-largest altcoin by market cap is trading at around $2. 17, with the bulls pushing to regain control of the trend.
Bitcoin traded just above $93,416 on Thursday as expectations mounted that the US Federal Reserve would cut interest rates next week. During the morning session, the cryptocurrency dipped to $92,612 before climbing to an intraday high of $94,002, reflecting renewed momentum after several weeks of turbulence.
Crypto markets staged a major turnaround on Tuesday as traders reacted to rising expectations of US interest-rate cuts and a surge in spot Bitcoin ETF activity following Vanguard’s decision to end its ban on Bitcoin ETF purchases.
