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Ripple CTO Says I Don’t Believe “Evil Forces” Make XRP and XLM Track Each Other
Ripple CTO has dismissed the notion of deliberate external forces causing a correlation in the price of XRP and Stellar (XLM).
This sentiment emerged amid debates about the longstanding painful price performances of XRP, with XLM exhibiting similar traits.
In the discourse, Ripple CTO David Schwartz shared his enduring beliefs about digital currencies. Specifically, Schwartz argued that token prices are largely rational, with all foreseeable factors already incorporated into the existing price.
Furthermore, he pointed out that the prices of most digital assets tend to move in tandem. Drawing a parallel to traditional stocks, he likened the correlation between digital assets to that of Coke and Pepsi.
He explained that their stock prices would likely move together based on the perception of the overall growth or contraction of the cola market. In his opinion, the digital asset market is predominantly influenced by factors that impact most digital assets uniformly.
You could see it that way. Another way is to say that the market has limited confidence those things will improve significantly.
Another observation is that the prices of most digital assets seem to move together. Think about Coke and Pepsi. Why would their stock prices…
— David "JoelKatz" Schwartz (@JoelKatz) January 8, 2024
However, X user VanHasen responded to Ripple’s CTO by highlighting the irony of mentioning that the prices of most digital assets move together. He pointed out that XRP seems to be lagging compared to broader market trends.
VanHasen emphasized that although digital assets may move in sync in time, the percentage-wise movement of XRP notably differs. To support this claim, he pointed to specific trading pairs, such as XRP/BTC, where XRP failed to align percentage-wise with the broader market movements.
Look at XRP/XLM, Ripple CTO Says
In response, Ripple’s CTO urged the critic to examine the trading pair of XRP against XLM. Market data illustrated that XRP/XLM has a history of moving in tandem, responding alike to various forces and events.
Look at XRP/XLM. pic.twitter.com/ZqCYdbGpt0
— David "JoelKatz" Schwartz (@JoelKatz) January 8, 2024
Another XRP enthusiast pointed out the frustration regarding the interconnected price movements of XRP and XLM. They find it unusual that the prices of the two digital assets are closely tied together in their movements.
According to the commenter, the correlation is so distinct that it might be intentional or purposeful, implying that external factors or deliberate actions influence the parallel price movements of XRP and XLM.
David Schwartz Dismiss the Claim
Ripple CTO suggested that investors mentally group XRP and XLM together due to their shared history, causing factors affecting one to impact the other. Also, he pointed out that the same individuals often buy or sell both assets.
He added:
“I don’t believe some kind of manipulation or evil force is somehow making them track. That seems kind of crazy to me.”
I don't have a good explanation for it. I have two that are not great.
1. XRP and XLM are both being dragged around by the same market forces that are dragging around most other cryptos. While that's certainly true, it doesn't explain why XRP and XLM track more closely than…
— David "JoelKatz" Schwartz (@JoelKatz) January 8, 2024
Ultimately, David Schwartz admitted not having a satisfactory explanation about the correlation between XRP and XLM prices. Yet, he maintained that XRP and XLM are influenced by general market forces affecting most cryptocurrencies.