Whether Ripple is worth the $ 10B valuation when XRP lost 95% value and still in downtrend?

By Emma On Dec 25, 2019

As AZCoin News reported, Ripple recently raised $ 200 million in Series C funding. This number has surprised in much of the great financial world. It is currently one of the most valuable private startups in Silicon Valley. After this funding round, Ripple is presently valued at $ 10 billion.

Analysts have been confused about how to be worth $ 10B. One user believes that the Ripple team can streamline their pricing by merely having a giant battle chest through the sale of XRP in the market. Every month, the team unlocks 1 billion XRP. There are hundreds of millions of dollars in XRP released every month. It is still unclear where these tokens have gone, other than the explanation of ‘on-demand liquidity.’

XRP price has lost 95% of its value

XRP, which has been steadily declining and is now down to 95% from its all-time highs (over $ 3 in January 2018). XRP started 2019 at $ 0.33 but is currently trading at around $ 0.188, making this asset one of the worst performing coins in 2019.

$XRP has lost 95% from the peak, there seems to be no use case for it & the company that created it just raised $200m in a C round (which is normally 10-20% ownership).

Did they essentially buy a large % of the crypto by proxy? Confusing. Theories? https://t.co/Og5Mb8vORd

— [email protected] (@Jason) December 20, 2019

An analysis indicated the downward trajectory of the cryptocurrency market might continue.

The current overall technical ratings for XRP are at strong selling levels.

On both daily and monthly time frames are within the ‘strong sell’ range, while the 1-minute, 5-minute, 15-minute, and hourly ratings are within the selling range.

Source: Trading View

(This is Trading View’s exclusive ranking system, using a combination of common technical indicators including moving averages, oscillators, and pivots to analyze where assets can be headed.)

After increasing ~ 26% of its value between September 17 and September 18, XRP collapsed 33% in the next six days, causing the community to panic. The token has hit the lowest seen in the previous two years. While the increase was relatively impressive from $ 0.22 to more than $ 0.31 in the following month and a half, it can be commented that November was unkind to XRP.

XRP touched another 2-year low of $ 0.18 after falling by almost 44% in 40 days since November 7.

Source: Trading View

In the long term, XRP looks bearish, with the 50 and 200-day moving averages far out of current price after a death cross in mid-August. The MACD also shows a more significant bearish outlook for the currency in the long term. However, on a shorter time scale, XRP seems to be bullish.

CoinMetrics data shows that XRP’s correlation with BTC has reached about 0.72, up steadily from 0.46 at the end of October. A short-term pump follows Bitcoin’s recent unprecedented break from the ascending triangle pattern, XRP can mimic if the price drops further.

Is Ripple worth the $ 10B valuation?

All of this raises the question: what justifies Ripple’s $ 10B valuation, and is this another bubble waiting to burst?

Ripple claimed it has about 300 financial services customers globally. Working relationships with some large companies have yet to materialize into a real profit stream for Ripple. All three Ripple’s xRapid, xVia, and xCurrent products were removed from the company’s website in October due to a lack of interest.

XRP does not represent a share of the company and is also non-exchangeable for a Ripple stock. Instead, it is just a sendable token. At least, it seems inevitable that XRP is not a security, so it has a net advantage over other cryptocurrencies. However, whether it is worth the $ 10B valuation, is an entirely different question. As of now, most analysts don’t believe that.

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