As a seasoned analyst with years of experience navigating the volatile world of cryptocurrencies, I find myself intrigued by the ongoing debate surrounding XRP. The recent video titled “What is wrong with XRP” presents an interesting perspective, but one that I must respectfully disagree with.
The XRP community recently erupted with a video dubbed, “What is wrong with XRP,” where the author names three reasons why popular cryptocurrency is not a good investment.
Essentially, the crux of this research lies in the shift of purpose for XRP, initially designed as a medium for international transactions, has been surpassed by stablecoins, deemed more effective. Interestingly, Ripple’s recent introduction of its own stablecoin, RLUSD, appears to further substantiate this claim.
One of the reasons given is that Ripple intends to go public via an IPO, which significantly changes XRP’s function as a benchmark for evaluating Ripple’s overall crypto company performance. Another point raised is that Ripple owns a large quantity of XRP – around 38 billion coins – and sells some of it to finance their operations. The video’s author argues, therefore, that XRP may not be a wise investment choice due to these factors.
As a researcher examining the topic, I’d like to clarify a common misconception: Although individual users may not need to hold XRP to utilize it for transactions, it is crucial that others do so to maintain market liquidity. This is a point emphasized by Ripple CTO David Schwartz himself when he addressed these claims.
As a researcher examining the topic, I find it questionable that the first point is misguided. It’s accurate that users can utilize XRP for transactions without actually owning it, which is beneficial as it allows them to avoid direct exposure to its volatility if they so choose. However, simply because people have the option not to hold XRP doesn’t automatically mean that no one will decide to do so. In other words, just because there’s a choice, it doesn’t necessarily imply that everyone will exercise that choice.
— David “JoelKatz” Schwartz (@JoelKatz) December 18, 2024
Additionally, he challenged the idea that the value of XRP is exclusively influenced by adjustments within its ecosystem or hype, providing historical charts comparing XRP and XLM prices to support his argument. Earlier, Schwartz pointed out a correlation between the price movements of Stellar’s token and XRP’s performance.
This additional evidence showed that the two investments were aligning closely, as one acted as a ‘beta’ and tended to follow the lead of market players.
Ultimately, Schwartz proposed that owning XRP could be beneficial in minimizing the number of currency swaps required and improving transaction efficiency. In his view, it might be sensible to hold XRP if you’re unsure which currency is needed for a payment. Given the large number of stablecoins available, keeping XRP as your only intermediate asset still holds merit.
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2024-12-19 14:11