Ripple, the third-largest cryptocurrency, has turned out to be one of the most active blockchain companies that have largely disrupted the fintech space. Banks and other financial institutions have realized its massive potential, hence many financial institutions have started to decentralize their processes using Ripple’s products.
Ripple continues to be involved in various controversies as the blockchain company holds 60% of the total supply of XRP, which the native cryptocurrency used in various payment solutions developed by Ripple. Despite being the highest shareholder, Ripple has never acknowledged its relationship with XRP.
EX – CTO dumps XRP
Throughout 2019, the company sold its XRP holdings and the XRP community was never comfortable with this, especially because the price of the token has been tumbling down constantly. Now, a recent report from Whale Alert, the live crypto transaction tracker, noted that Jed McCaleb, co-founder of Ripple and Stellar, has sold 1.05 billion XRP since 2014.
Whale Alert has analyzed McCaleb’s sales history and has found out that he currently possesses 4.7 billion XRP, and has sold 19 million XRP this month itself.
McCaleb’s XRP holdings were compensation for his earlier position at Ripple. He has always been vocal about his intention to sell off all of his XRP holdings. Back in 2016, after a legal battle with Ripple over how much XRP he was selling, both the parties reached an agreement that would allow McCaleb to slowly sell a remaining 5.3 billion XRP at a rate as high as 1.5% of the average daily volume of the digital asset.
Since Ripple has always been selling off huge amounts of XRP and the price of token still remains far below its all-time high, the community has been concerned that McCaleb’s sell-offs could have a direct impact on XRP’s price. According to Whale Alert, compared to the trading volume of all XRP on the market, McCaleb’s sales seem insignificant.
McCaleb is known to exclusively sell his XRP on Bitstamp and convert it to cash. He also does not appear to be trading his XRP for other crypto assets. The report further discusses the fact that the sell-off would affect the price of XRP only if the net change of XRP on the market is significant enough. A part of the report reads:
“Compared to the total trade volume per day, the amount he is selling seems insignificant. For instance, from the 1st to the 7th of June 2017, he sold a total of 2.5 million XRP for $741,000. The total trade volume that week for the XRP/USD pair on Bitstamp alone was 127 million XRP, but volume is not a good indicator for how much the market can absorb[…] the real question is how much effect McCaleb has on the net amount of XRP available. Even though we do not yet have enough data to make a conclusive statement on this, we can determine that, because he is exclusively selling XRP, he is adding to the net amount available.”
XRP is no stranger to big shorts
Earlier, as XRP price started to decline, many members of the XRP community were claiming that Ripple was deliberately trying to crash the price of XRP. This fiasco had escalated to such an extent that in August, a Change.org petition dubbed “Stop Ripple Dumping” was started by a crypto twitter personality and an XRP advocate going by the name of Crypto BitLord.
Following this, the XRP community had also threatened to Fork XRP if Ripple did not address the situation.
XRP is often accused of being a Centralised project since Ripple controls 60 percent of XRP. Ripple, however, has claimed on several occasions that it is selling these XRP tokens to invest in different firms that would benefit the XRP ecosystem, and it’s selling of the tokens have no effect on the price of XRP as, despite the sales, XRP’s inflation has remained lower than Bitcoin and Ethereum.