thecryptobasic.com
The CTO of Ripple, David Schwartz, recently expressed his belief that the primary factors dictating the price dynamics of XRP are not linked to the XRPL ecosystem.
Schwartz disclosed this while addressing concerns from the XRP community. Notably, concerns surrounding the impact of Ripple’s sales have taken center stage in the community, requiring necessary clarifications.
Concerns Around Ripple’s Sales
Some community members believe XRP suffers from price suppression as a result of Ripple’s continuous sales of XRP. However, others, including pro-crypto attorney Bill Morgan, hold a different view, contending that the asset’s underperformance is not linked to these sales.
Most recently, documents containing emails on Ripple’s past programmatic sales caught the community’s attention. The docs, which reveal a conversation between Ripple CEO Brad Garlinghouse’s team and market maker GSR, compounded the community concerns.
Schwartz has clarified that Ripple stopped programmatic sales in 2020 but has continued to sell XRP through ODL (now Ripple Payments). As discussions surrounding these documents persist, Schwartz recently stressed that the amount of XRP Ripple sells should not be a cause for alarm.
A Request for Ripple to Halt Its XRP Sales
In response, DARKHORSE, the crypto researcher who called the public’s attention to the documents, asked Schwartz if Ripple could pivot from how it currently sells XRP or stop the sales for a month or two to observe the price reaction from XRP.
The Ripple CTO noted that this would mean purposely manipulating the price of the asset. According to Schwartz, the request from DARKHORSE is similar to a price manipulation tactic, a move that goes against the ethics of the market.
Thanks, David; it's appreciated. Just to clarify, my question isn't about endorsing manipulation. Instead, it's about considering potential adjustments to sales strategies and XRP deployment. While Ripple oversees the Escrow, ensuring transparency is crucial. The bots mentioned…
— ĐΛRKHØRSΞ™ (@DarkhorseDNME4) February 19, 2024
In a subsequent remark, Schwartz confirmed that Ripple has pivoted from the original plan to distribute its extensive XRP holdings. He noted that the company sought to shed off its holdings through giveaways, but this plan did not go as intended.
As a result, Ripple switched to another avenue because the firm did not wish to continue holding as much XRP as it did for long. Ripple has been releasing 1 billion XRP from escrow each month, but they typically lock back most of these tokens, retaining a portion for sales.
XRP Price Not Dictated by Ecosystem Factors
The Ripple CTO emphasized that the company has no other option but to continue selling off its XRP holdings to reduce the amount it holds. He further argued against the belief that ecosystem developments primarily drive the price of XRP.
We were originally hoping to get our holdings way down in just a few years mostly using giveaways. That strategy just didn't work. We don't want to be holding lots of XRP for decades, but it's not clear what other options we have.
FWIW, I believe the primary drivers of XRP's…
— David "JoelKatz" Schwartz (@JoelKatz) February 19, 2024
To support his position, Schwartz referenced a previous post concerning the correlation between the prices of XRP and XLM. XLM has continued to mirror XRP’s price despite its ecosystem recording completely different developments, including the massive token burn of 55 billion XLM in November 2019.
Following this burn, XLM failed to record any substantial price upsurge. Instead, its value moved along XRP’s price. Schwartz’s argument aligns with the sentiment that XRP’s price is dictated by broader market trends and not specific developments in the XRP ecosystem.