Ripple CTO slams users suggesting XRP giveaway, altcoin dips to $0.55
|- Ripple CTO David Schwartz says that giving away XRP is worse than selling the altcoin, addresses holder concerns.
- XRP whales distribute holdings, while several segments of retail users buy the altcoin this week.
- XRP trades at $0.55, erasing 7.6% of its value since Monday.
Ripple (XRP) Chief Technical Officer (CTO) David Schwartz addressed concerns about token giveaways by the cross-border payment remittance firm.
Schwartz responded to tweets on X and shared his thoughts on why giving away XRP as a reward is worse than selling.
XRP trades at $0.55 at the time of writing.
Daily digest market movers: Ripple CTO says XRP giveaway is worse than selling
- The Ripple network is known to periodically sell XRP tokens to sustain its ecosystem. The cross-border payments remittance firm uses XRP as a bridge currency to settle transactions, thereby selling XRP Ledger’s native token to member institutions in the ODL network.
- Ripple has been slammed by XRP holders on several occasions for token transfers and sales. CTO David Schwartz addressed the issue by sharing his thoughts on pledging XRP tokens to a liquidity pool or giving them away as a reward.
- While one user commented on how there should be giveaways, Schwartz explained that fraudsters enter the game where giveaways or rewards are announced. What’s more Schwartz explains that locking XRP tokens in a liquidity pool would mean the equivalent of selling 50% of them for the other asset in the pool. This creates selling pressure on the asset, negatively influencing price.
- The Ripple CTO had shared his thoughts on the issue in 2021 as well.
Giving XRP away is functionally the same as selling it, but worse because people will spend $.95 to game a $1 giveaway and most of the funds wind up in the hands of the fraudsters. We tried this and it worked until XRP became liquid.
— David "JoelKatz" Schwartz (@JoelKatz) March 26, 2024
Giving XRP away is functionally the same as selling it, but worse because people will spend $.95 to game a $1 giveaway and most of the funds wind up in the hands of the fraudsters. We tried this and it worked until XRP became liquid.
— David "JoelKatz" Schwartz (@JoelKatz) March 26, 2024
- Ripple recently announced that its stablecoin Ripple USD (RUSD) will be available for institutions in its network, post regulatory approval.
- The stablecoin is currently in a private beta phase and is not available for purchase or trade yet.
- Santiment data shows that large wallet investors holding over 100 million XRP have distributed their holdings as retail traders accumulated.
- Typically, whale distribution is considered a bearish sign for an asset.
XRP supply distribution
Technical analysis: XRP dips to $0.55
XRP erased nearly 8% of its value this week, down to $0.55 early on Friday at the time of writing. The altcoin has been in a multi-month downtrend since its July 2023 top.
XRP could sweep liquidity at $0.51 if there is a further correction in the altcoin. At this point, traders who accumulated could attempt to push it back above key support at $0.55 and $0.57.
The Moving Average Convergence Divergence (MACD) indicator shows red histogram bars under the neutral line, signaling negative underlying momentum in the Ripple price trend.
XRP/USDT daily chart
A daily candlestick close above $0.57 could invalidate the bearish thesis. This has been a key resistance level for the altcoin throughout August. XRP could rally toward $0.60, a psychologically important level for Ripple.
Bitcoin, altcoins, stablecoins FAQs
Bitcoin is the largest cryptocurrency by market capitalization, a virtual currency designed to serve as money. This form of payment cannot be controlled by any one person, group, or entity, which eliminates the need for third-party participation during financial transactions.
Altcoins are any cryptocurrency apart from Bitcoin, but some also regard Ethereum as a non-altcoin because it is from these two cryptocurrencies that forking happens. If this is true, then Litecoin is the first altcoin, forked from the Bitcoin protocol and, therefore, an “improved” version of it.
Stablecoins are cryptocurrencies designed to have a stable price, with their value backed by a reserve of the asset it represents. To achieve this, the value of any one stablecoin is pegged to a commodity or financial instrument, such as the US Dollar (USD), with its supply regulated by an algorithm or demand. The main goal of stablecoins is to provide an on/off-ramp for investors willing to trade and invest in cryptocurrencies. Stablecoins also allow investors to store value since cryptocurrencies, in general, are subject to volatility.
Bitcoin dominance is the ratio of Bitcoin's market capitalization to the total market capitalization of all cryptocurrencies combined. It provides a clear picture of Bitcoin’s interest among investors. A high BTC dominance typically happens before and during a bull run, in which investors resort to investing in relatively stable and high market capitalization cryptocurrency like Bitcoin. A drop in BTC dominance usually means that investors are moving their capital and/or profits to altcoins in a quest for higher returns, which usually triggers an explosion of altcoin rallies.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.