Ripple CTO clears the air on XRP giveaway, altcoin down to $0.55
- Ripple CTO David Schwartz says that giving away XRP is worse than selling the altcoin, addresses holder concerns.
- XRP whales distribute holdings, while several segments of retail users buy the altcoin this week.
- XRP trades at $0.55, erasing 7.6% of its value since Monday.
Ripple (XRP) Chief Technical Officer (CTO) David Schwartz addressed concerns about token giveaways by the cross-border payment remittance firm.
Schwartz responded to tweets on X and shared his thoughts on why giving away XRP as a reward is worse than selling.
XRP trades at $0.55 at the time of writing.
Daily digest market movers: Ripple CTO says XRP giveaway is worse than selling
- The Ripple network is known to periodically sell XRP tokens to sustain its ecosystem. The cross-border payments remittance firm uses XRP as a bridge currency to settle transactions, thereby selling XRP Ledger’s native token to member institutions in the ODL network.
- Ripple has been slammed by XRP holders on several occasions for token transfers and sales. CTO David Schwartz addressed the issue by sharing his thoughts on pledging XRP tokens to a liquidity pool or giving them away as a reward.
- While one user commented on how there should be giveaways, Schwartz explained that fraudsters enter the game where giveaways or rewards are announced. What’s more Schwartz explains that locking XRP tokens in a liquidity pool would mean the equivalent of selling 50% of them for the other asset in the pool. This creates selling pressure on the asset, negatively influencing price.
- The Ripple CTO had shared his thoughts on the issue in 2021 as well.
Giving XRP away is functionally the same as selling it, but worse because people will spend $.95 to game a $1 giveaway and most of the funds wind up in the hands of the fraudsters. We tried this and it worked until XRP became liquid.
— David "JoelKatz" Schwartz (@JoelKatz) March 26, 2024
- Ripple recently announced that its stablecoin Ripple USD (RUSD) will be available for institutions in its network, post regulatory approval.
- The stablecoin is currently in a private beta phase and is not available for purchase or trade yet.
- Santiment data shows that large wallet investors holding over 100 million XRP have distributed their holdings as retail traders accumulated.
- Typically, whale distribution is considered a bearish sign for an asset.
 [20.32.33, 30 Aug, 2024]-638606308565578144.png)
XRP supply distribution
Technical analysis: XRP dips to $0.55
XRP erased nearly 8% of its value this week, down to $0.55 early on Friday at the time of writing. The altcoin has been in a multi-month downtrend since its July 2023 top.
XRP could sweep liquidity at $0.51 if there is a further correction in the altcoin. At this point, traders who accumulated could attempt to push it back above key support at $0.55 and $0.57.
The Moving Average Convergence Divergence (MACD) indicator shows red histogram bars under the neutral line, signaling negative underlying momentum in the Ripple price trend.
XRP/USDT daily chart
A daily candlestick close above $0.57 could invalidate the bearish thesis. This has been a key resistance level for the altcoin throughout August. XRP could rally toward $0.60, a psychologically important level for Ripple.
Ripple FAQs
Ripple is a payments company that specializes in cross-border remittance. The company does this by leveraging blockchain technology. RippleNet is a network used for payments transfer created by Ripple Labs Inc. and is open to financial institutions worldwide. The company also leverages the XRP token.
XRP is the native token of the decentralized blockchain XRPLedger. The token is used by Ripple Labs to facilitate transactions on the XRPLedger, helping financial institutions transfer value in a borderless manner. XRP therefore facilitates trustless and instant payments on the XRPLedger chain, helping financial firms save on the cost of transacting worldwide.
XRPLedger is based on a distributed ledger technology and the blockchain using XRP to power transactions. The ledger is different from other blockchains as it has a built-in inflammatory protocol that helps fight spam and distributed denial-of-service (DDOS) attacks. The XRPL is maintained by a peer-to-peer network known as the global XRP Ledger community.
XRP uses the interledger standard. This is a blockchain protocol that aids payments across different networks. For instance, XRP’s blockchain can connect the ledgers of two or more banks. This effectively removes intermediaries and the need for centralization in the system. XRP acts as the native token of the XRPLedger blockchain engineered by Jed McCaleb, Arthur Britto and David Schwartz.
Author
Ekta Mourya
FXStreet
Ekta Mourya has extensive experience in fundamental and on-chain analysis, particularly focused on impact of macroeconomics and central bank policies on cryptocurrencies.
