zycrypto.com
The recent burning of the Stellar (XLM) tokens and the nearly 30% surge has led many to believe that Ripple Lab Inc’s XRP will also follow the same scenario if XRP burns out its tokens.
The truth is that there are many different factors to be considered on the matter before any conclusions or deductions can be made concerning the issue.
Firstly, the use case scenario of the XRP token is singular; that is the token finds it major use cases in the finance and banking sector, so as such, the singular focus will allow for the market forces within the financial sector to determine the price rather than the token supply which has been seen over and over again.
XRP tied to events within the financial sector
Historical analysis shows that with every event that occurs in favor of Ripple, there is always a slight bump in XRP prices which shows that the XRP token is event-driven by the expansion of its use-case scenarios.
Secondly, the escrow account usage feature that Ripple Labs Inc employs from time-to-time also drives prices up or down in tandem with the total number of tokens in circulation.
Direct effect on the price of XRP due to the forces of demand and supply
On the other hand, Stellar’s Lumens have multiple use-case scenarios in different industries ranging from IBM to premier accounting firm Delloite thus deconcentrating the market forces at play.
The only remedy that could significantly bring the token back to focus was the burnout which coincided with the Meridian event.
As such, the price surge became apparent due to the scarcity of tokens as the wider use-case scenario of the token drove demand higher than usual.
With the refocus of the XLM token, we are certain to see new levels of price support as the alignment of the remaining tokens in circulation cover the whole gamut from consumer usage to rewards for application development in the XLM ecosystem.
In answer to the question of a price increase of the XRP token in similar ways with the XLM in terms of burnout the answer remains that it is quite possible but it depends on a whole lot of factors.