- Ripple price bowed to both internal and external factors leading to its underperformance.
- Ripple sales of XRP to institutional clients to continue as it makes the company profitable.
According to a report by Messari, a cryptocurrency analysis firm, Ripple (XRP) continues to underperform for the second year in a row. Data analyzed by Messari found that XRP was the worst-performing digital asset among the top 25 cryptocurrencies in the first quarter on 2020. Ripple’s market capitalization has thinned significantly according to the data b CoinMarketCup, however, it continues to hold the third position in the crypto market. At the time of writing XRP is trading at $0.1875 after accruing 0.74% gains in a day.
Why the underperformance?
A number of factors have contributed to XRP drab performance in 2019 and the first quarter of 2020. Some of these factors are internal others are external. Factors related to the general market are mostly associated with the ongoing COVID-19 pandemic that has seen investors panic sell their cryptoassets in favor of having fiat in case of emergencies. A successful fight against the virus would eventually lead to recovery both in the digital market and the traditional stocks and commodities markets.
Consequently, XRP has also fallen victim to internal factors such as the sale XRP tokens by Ripple, the company to institutional buyers. CEO Brad Garlinghouse admitted that the company will not be profitable without the disposal of these tokens. The community has for some time called out Ripple for ‘dumping’ XRP tokens on the market further affecting its performance. On the other hand, Ripple is very open with its quarterly sales and has made it clear it has no plans to completely halt these sales.
Other external factors pointed out by Messari is the uncertainty associated with the ongoing class-action lawsuit against Ripple. Ripple claims that XRP is not a security by the case is battling the company for selling unregistered security under US Federal Law. Therefore, XRP will continue to deal with uncertainty until the case is solved.
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