Messari Research: The inflation rate of XRP supply is hundreds of percent higher than that of Bitcoin or Ethereum
According to Florent Moulin – part of the research and product team at crypto research firm Messari Research, XRP’s supply inflation rate is 400% higher than Bitcoin or Ethereum.
Messari Research: The high inflation rate of XRP supply compared to Bitcoin
The company’s data shows that the XRP supply is increasing at a much higher rate than Bitcoin or Ethereum during the past 12 months.
Moulin stated:
“XRP had a supply inflating at a rate of 20% over the last year – five times higher than Bitcoin before the halving.”
To put 20% into some context, the inflation rate over the past 12 months of Tezos (XTZ) was 13%, 5.1% for Litecoin, and 4.7% for Ethereum. Most established fiat currencies have an inflation rate of 1-3% each year, though the way central banks determine the inflation of, say, the U.S. dollar is not growth in the supply of money.
Top cryptocurrencies’ inflation rate data from Messari.io
The large amount of XRP pushed into the market can reduce its price action compared to other cryptocurrencies.
Moulin said:
XRP circ supply inflation rate (20%) is the highest among large-cap assets over the past year, 5 times higher than BTC pre-halving.
Only 30% of XRP max supply has been distributed, vs 87.5% for BTC
BTC is up 20% since last year, XRP is down 47%.https://t.co/NRtXm0QpGE
— Florent Moulin (@fmoulin7) May 21, 2020
Kyle Samani of prominent crypto fund Multicoin Capital corroborated this narrative.
He said:
“The company has been steadily increasing its sales of XRP over the previous three quarters, likely inflicting downward price pressure on XRP. Savvy Investors have known this for some time; however, for whatever reason, the market is just now picking up the narrative and reacting.”
Samani and his fund have been publicly short/bearish XRP for a while now, with the inflation narrative seemingly being one of the core reasons why Mutlicoin Capital is bearish.
However, Ripple executives stated:
“The coins we sell, which constitutes the inflation of XRP, don’t have a tangible effect on the underlying market. Or at least not much more of an effect than a Bitcoin whale has on the BTC market.”
According to CNN, Brad Garlinghouse, chief executive of Ripple, regarding his company’s sales of XRP:
“In the XRP community, Ripple is the largest owner, and we are the most interested party in the success of the XRP ecosystem. Ripple can’t control the price of XRP anymore than a whale controls the price of Bitcoin.”
Garlinghouse added in a tangentially related Twitter comment published around the same time as the interview that the funds earned through the sales of XRP are put to good use:
“XRP sales are about helping expand XRP’s utility – building RippleNet & supporting other biz building w/XRP, i.e., Dharma & Forte.”
Top analysts largely discounted cryptocurrencies
Even with the reassurance of Ripple executives, many analysts are still extremely down on the long-term prospects of the top altcoin.
Prominent crypto derivatives trader Cantering Clark recently likened XRP’s macro chart to that of assets that had “promising tech” but failed dramatically after their initial surge in popularity.
“Here are just a few of the hundreds of 10-year charts you can find for promising tech. See a similarity? Many of these same charts have forums of people still talking about the recovery to come.”
Chart from a crypto trader “Cantering Clark”
From Clark’s perspective, many people still hold on to expect XRP to rally sharply over the long term. According to Peter Brandt, a veteran commodities trader and long-term Bitcoin bull, XRP’s chart is looking extremely bearish because there is only “white space below” the current price.
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Read more:
- Ripple CEO Brad Garlinghouse Called On U.S. Regulators To Embrace Digital Currencies To Compete With China
- XRP Price And The Rest Of The Cryptocurrency Market Begun To Underperform The Market Leader Yet Again