One cryptocurrency stands out from the exciting recovery process of the year.
XRP tumbled about 20%, while 8 of the top 10 cryptos are posting gains. Even though the currency lost about $3 billion in market cap in 2019, it’s still the third-biggest crypto coin after BTC and ETH.
Majority of the investors are blaming Ripple for the current situation, the payment services provider that controls, along with its founders, about 75% of all XRP tokens, according to Coin Metrics, a data researcher company.
Reports of the company show it’s been trading the coin at an increasing pace. Co-founder of Ripple Jed McCaleb, who is no longer working there, sells 500000 XRP daily.
Co-founder of crypto hedge fund Multicoin Capital in Austin, Texas, Kyle Samani said: “The company has been steadily increasing their sales of XRP over the last 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”.
There is an online petition on Change.org, which is already signed by more than 2000 users to “stop Ripple dumping”.
Ripple, for its part, opposed the increase. Programmatic sales of XRP “as a percentage of volume and the actual supply inflation rate were lower” than for Bitcoin or Ether, it said in a statement on Friday. Sales had been tied to trading volumes published by exchanges and recognizing that some platforms were misreporting volumes, Ripple has “substantially reduced XRP sales,” a trend that’s supposed to continue this quarter, the organisation said. It also said discrepancies Coin Metrics found to come down “to a timeline issue.”
“We believe in being as transparent as possible,” it said, pointing to its quarterly reports. The pace of reported selling has increased recently.
Eric Turner, director of research at Messari, said: “Ripple has been more aggressive in their selling lately. Last quarter’s $251.5 million was up almost 50% from the $169.4 million sold in Q1.”
“Ripple keeps selling because it is a major source of revenue for them,” Turner mentioned. “I don’t expect them to stop selling any time soon. If someone gave you a printing press that spits out hundreds of millions of dollars a quarter, would you stop using it?”.