Bitcoin has been growing for 17 days in a row and has seen a $ 750 (+ 13.65%) rise in value since the 6th month. Ripple added at 9% to the current price, but its move does not look nearly bullish.
Move $ 192 million in XRP
Fintech Ripple, based in San Francisco, began the New Year with another controversial release of tokens. Another 192 million XRPs were transferred from Ripple Escrow to an unknown Ripple wallet.
Research firm Weiss Ratings recently commented on the bizarre XRP tokenomics policy.
2020 at Ripple begins with a further release of XRP tokens worth $192 million as part of a planned incentive scheme. These constant dumps that Ripple makes are not helping the price of XRP, that’s for sure.
In August, Ripple CEO Brad Garlinghouse said XRP sales are going to increase assets through tokenomics, not XRP investors’ investments.
In practice, starting from 2019, this meant a monthly release of approximately $ 200 million XRP for OTC. This release resulted in a decrease in the XRP value (of course, the price is also affected by other macro or micro data). For example, we see a contrast to Bitcoin where Halving takes place and the number of bitcoins in circulation will halve after halving from 12.5 to 6.25 BTC per block. In the case of XRP, this is an increase in tokens in circulation, and by this equation we get a reduction in the rarity of XRP and, of course, a lower price per one token. Unlike Bitcoin, where the number of tokens decreases, the rarity will increase and the price will logically increase in the long run (historically this has happened every time Halving has taken place).
Conflict of interests
The reason why there are still less freely released Bitcoin is that the price is rising. Ripple deliberately reduces value for one XRP token in the medium term. According to some observations in 2019, more and more investors believe that Ripple does not care so much about the well-being of investors who are raising capital by growing for a single XRP token, but rather about the well-being of Ripple through asset appreciation by increasing assets. This puts us in contrast to society’s interest vs. investor’s profit.
If we look at the graph now, we see that with almost a 14% increase in Bitcoin Ripple followed only almost 10%. If nothing changes in XRP policy, we can expect the same course of price development, almost all year to the side and in 2020. From the fundamental analysis point of view, there is no reason for the growth of the XRP token and value as it was in 2019 when we fell in price lower than it was in bear market 2018.
There is no denying that XRP is one of the worst performance cryptoactive with a low cap in 2019. Since the same period last year, XRP has fallen by 50% from $ 0.375 to the current level of around $ 0.187.
The market capitalization fell to $ 8 billion, far from the epic $ 150 billion that was invested in the token during the crypto bubbles this time two years ago. So how far the patience of investors is likely to see soon.
But XRP could dominate the institutional banking system thanks to the possibility of XRP partnerships with Western Union or MoneyGram in 2020. Could be the factor, which icrease XRP price.