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Even though Brad Garlinghouse has repeated more than once that both Ripple and XRP are different, the CEO has recently mentioned that selling XRP keeps the company afloat.
XRP is the third-largest digital asset in the crypto market and has maintained that position for a long time. Ripple is also making moves that benefit XRP. For example, the company is doing a lot in the financial scene, especially for cross-border transactions. Securing partnerships with many companies all over the world, Ripple is pushing its financial products, some of which use XRP as a base. Ripple has also been selling a lot of XRP, consistently, for quite a while. This move, according to Ripple CEO Brad Garlinghouse, keeps the company afloat.
Ripple Will Tank without Selling XRP
In a recent Financial Times report, Garlinghouse has spoken specifically about the company’s reliance on XRP. The CEO said that the major way Ripple keeps recording profits is by offloading XRP. The report quotes him saying:
“We would not be profitable or cash flow positive [without selling XRP], I think I’ve said that. We have now.”
While explaining the source of profits for Ripple Labs, Garlinghouse also notes that the company’s profits cannot be predicated on one channel. Still, he highlights that XRP is very important in the grand scheme of things.
“Well XRP is one source. I don’t know how to answer that because if you took away our software revenues, that would make us less profitable. If you took away all our XRP, that makes us less profitable. So I don’t think about it as one thing.”
Is Ripple Still Selling XRP?
For a large part of 2019, Ripple came under heavy criticism for its incessant dumps. Many investors criticized the company’s decision to constantly sell the tokens, which it did in large quantities. Members of the crypto community were largely convinced that Ripple was directly manipulating the XRP price with the dumps. At some point, there were calls for an XRP hard fork.
Towards the end of last year, Ripple significantly reduced the rate at which it was selling XRP. According to a report it published in January, the XRP dumps reduced by 80% in the last quarter of 2019. The company said it only sold $13.08 million worth of XRP compared to $66.24 million from Q3.
While this might be positive news for investors, Ripple is dipping into its escrow wallet and has unlocked access to 1 billion XRP tokens. No serious moves have been made with the funds. However, there is always the chance that Ripple will begin selling again. If it does, it will struggle to keep its investors’ faith and also plunge the price of XRP.
For a while now, Ripple has been pushing the idea that the company is different from XRP. Garlinghouse has tried to discourage people from conflating the two, saying that they are separate entities. The recent comment seems to arm XRP/Ripple naysayers, who never believed Ripple and XRP are not the same.