Altcoin News: Is Ripple (XRP) Overrated? Data Has Significant Problems
According to a survey by crypto startup Messari, the market capitalization of XRP is actually just over half that of CoinMarketCap’s $13 billion. Ripple, on the other hand, is $31 billion.
If you look at the ranking of the largest cryptocurrencies by market capitalization on CoinMarketCap, XRP is currently in second place. Ripple’s XRP tokens currently have a market capitalization of nearly $13 billion, just under $800 million, ahead of the third-placed Ethereum (ETH). But Messari, a startup that wants to bring transparency to the crypto-economy, casts doubt on those figures in a report released on Thursday.
XRP is likely overvalued by $6 billion
The above-mentioned market capitalization of $13 billion requires an outstanding supply of $41 billion. Messari calculated, however, that almost 47 percent of it could not circulate freely. Ripple, the company behind XRP, has set strict conditions for sale with the owners.
Ripple co-founder Jed McCaleb have locked up at least 6.7 billion of current XRP supply that can only be sold at a theoretical rate of 1% of daily trading volume.
“What I can sell a day is significantly less than 1% of the total daily volume. I’m not sure I’m at liberty to say how [reference trading volume] is calculated.“ McCaleb told Messari.
If one follows the calculations, then XRP would be with a market capitalization of approximately 6.8 billion US dollar only the third largest cryptocurrency. It would then be well behind Ethereum, but still well ahead of Bitcoin Cash (BCH). The latter currently ranks fourth with around $2.2 billion.
Ripple rates XRP much higher
Ripple (formerly Ripple Labs), on the other hand, believes that CoinMarketCap would still rate XRP’s market capitalization too low. A spokesman for the company told Coindesk that in truth, it would cost around $31 billion.
After all, you just need to multiply the current price by the number of assets in the cryptocurrency.
“We believe that any other calculation of market capitalization for XRP is not a clear representation of the truth,” the ripple spokesman continued.
If one follows Ripple's reading of things, one ends up with a market capitalization of approximately 31 billion US dollar. However, more than half of the 100 billion XRP (59 billion) generated are owned by Ripple himself. Of these, 52.5 billion are deposited in an escrow account. Ripple can spend a maximum of one billion a month on it.
Author: Marko Vidrih
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