Ripple’s XRP has not been performing well in the last 2 years. This has sparked range and concern among investors who fear the project might die if the same trend continues into 2020. In the past, Fear, Uncertainty, and Doubt has seen projects and their tokens fall out of favor and soon after prices fall to zero or nearly that. With concerns arising, popular analyst Mati Greenspan has sort to explain what he believes to be going wrong with XRP. Notably, both reasons have to do with Ripple.
Since XRP broke below $0.28, there’s been little effort to get back up. There’s also been little support going down with the asset testing the $0.18 support recently. In the last couple of weeks, the third-largest cryptocurrency by market cap has been stuck around the $0.19 position.
Mati Greenspan’s Take On XRP
Analyst Mati Greenspan has in a recent tweet outlined what could possibly be wrong with XRP. Both of his reasons have something to do with Ripple the company behind XRP.
He stated that the first issue with XRP is that Ripple is holding a large portion of tokens. He continues to say that Ripple will sell this amount during rallies. This notorious behavior will flood the market and saturate prices.
This is further made worse as the company will occasionally sell their stash even when prices are suffering. In the last year, the company has unlocked hundreds of millions worth of XRP and sold them to facilitate a number of developments. During these sell-offs, we have seen prices fall and investors panic.
Yes. XRP tokenomics is a bit funny that way. The two main issues…
1. Ripple holding a large portion of tokens and selling into the rallies.
2. Usage of the network does not necessarily require XRP tokens. Banks can use Ripplenet w/o ever touching the token. https://t.co/oDM2dO1vhV
— Mati Greenspan [not trading advice] (@MatiGreenspan) December 29, 2019
The second reason that Mati Greenspan has given is the use of Ripplenet by banks He explains that banks can use this product without ever touching XRP. This means that though it would seem like banks adopting Ripplenet is a good thing for XRP and grows adoption, it could easily fail to impact it.
Despite the criticism, the analyst says that his long term prospects for XRP are bullish. What do you think?