Ripple purchasing XRP on the secondary market and triggering a fresh debate on the state of XRP
According to Q2 Markets Report, Ripple said it had purchased XRP on the secondary market (however, the amount was not disclosed); simultaneously sold about $ 32.55 million worth of XRP in the second quarter through OTC transactions. And this has sparked a new debate over the status of XRP.
Ripple purchasing XRP on the secondary market is triggering a new debt on the state of XRP
To increase liquidity for XRP – On-Demand Liquidity – Ripple sold $ 32.55 million worth of XRP in the second quarter through over-the-counter (OTC) transactions.
The report stated:
“In Q2 2020, total XRP sales were $32.55 million (USD) vs. $1.75 million in the previous quarter. Ripple continued the pause of programmatic sales, focusing solely on its over-the-counter (OTC) sales as part of providing increased XRP liquidity to RippleNet’s On-Demand Liquidity (ODL) customers. This added liquidity is vital as ODL continues to evolve and expand into new corridors… As more financial institutions leverage RippleNet’s ODL service, more liquidity is added into the XRP market. That said, Ripple has been a buyer in the secondary market and may continue to undertake purchases in the future at market prices.”
This new move by Ripple sparked a massive debate on Reddit.
One of the XRP buyers said:
“The fact that Ripple has stopped programmatic selling of XRP to the open market and is now buying back from the open market is huge IMO. It means Ripple is making enough money from their business that they can now afford to buy back up XRP thus lowering supply and increasing demand and therefore price. They are still doing OTC sales, but given Ripple’s track record, these are all likely part of on-boarding contracts. Many of these companies will be holding onto the XRP they receive to utilize in future transaction flows.”
Others agree; with some hints, Ripple bought XRP in anticipation of the price going up.
A Redditor stated:
“A stock buys back can often be seen as one of the most positive things a company can do with its capital to reinvest in themselves under the opinion that the market has undervalued the price. (Not that I’m suggesting XRP is a “stock”). Let that sink in for a moment.”
But not all crypto enthusiasts are optimistic about Ripple’s move, with some equating the company’s XRP buying with stock repurchases – the fact of companies buying shares of their own.
“You do realize most CEOs and executive teams around the globe have used share buybacks as a way to artificially drive up the price of their company’s stocks allowing them to cash out at a higher price? Basically a legal way of insider trading. Now substitute in what I’ve just mentioned the word ‘shares’ for ‘XRP’ and hopefully, you’ll see why this is nothing more than Ripple execs and VCs looking to unload their personal stash at a higher price at your expense.”
Ripple says it may continue to buy XRP at market price in the future, as it appears to play a responsible role in driving liquidity in the XRP remittance market.
XRP is one of only a handful of crypto assets that boast long-term sustainability
In a new interview with Thinking Crypto, Pantera CEO Dan Morehead said Ripple is a highly productive member of the industry – whether people like it or not.
Pantera is an early investor in Ripple, along with 49 other blockchain startups.
“I think Ripple has done a great job. They are one of the big enterprises in our business and they have hundreds of engineers building a lot of code and shipping code. And they’re doing it in a little bit of a different way. I know there’s a lot of purists in our industry that get almost religious about, oh, it’s not totally decentralized, or it’s not whatever. It’s the same thing with central bank coins. They’re not decentralized but we’ll need that too, right? I see a world where we have eight or ten really important blockchains ten years from now, and XRP is going to be one of them.”
Morehead says its smarter to place multiple bets in the industry instead of hoping that one crypto company or coin takes over the whole market.
“I don’t have the view a lot of people do in our space… like there’s only one and only true heaven and it has to be whatever it is, Ether or Bitcoin or whatever it is. They do different things and it’s kind of like in the early 90’s being a Yahoo! maximalist. Yeah, Yahoo is good, but there were 30 really important companies and a portfolio should have had a little bit of all those. And that’s the way I feel about cryptocurrencies. Each one of the eight or ten that are going to exist in ten years is going to do its own thing.”
Morehead says he believes crypto assets aren’t necessarily battling against one another and there’s more than enough room for multiple projects to thrive.
“They’re competing with trillions of dollar markets like gold, cross-border money movement, remittance, wealth storage, all that stuff. So there’s plenty of opportunities. And that’s another thing I always like to remind people, is it’s not like XRP and ETH are fighting each other. We’re fighting the Argentine peso. To put it another way. We’re fighting these paper currencies and there’s plenty of room for each of the cryptos to work.”
As for the crypto status his firm has invested in, Morehead said the company’s largest allocation is in Bitcoin, followed by Ethereum. After that, Morehead lists Polkadot, Filecoin, Augur, and 0x as other Altcoins with large allocations at the firm.
In total, Pantera manages $600 million worth of assets in the crypto space, and the CEO says he personally invests in the firm’s capital funds.
Morehead remains bullish on Bitcoin, which he notes goes up, on average, a little more than 200% per year, despite the “manic” bull and bear runs that grab the headlines.
He believes there is an inefficiency in the market that fails to completely price in the impact of Bitcoin’s halvings before they happen.
“Over the past two halvings, there have been very clear positive impulses. They start about a year and a quarter prior to the halving and they go for about 440 days after the halving. And what’s typically happened is the markets have gone up a bit into the halving, and then after the halving, over the next 440 days, they go up a ton.”
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