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While some experts are rather bullish about the performance of Ripple’s XRP in 2020, Mike Novogratz believes that the coin will underperform again this year.
XRP’s underperformance in 2020 is likely. It is the world’s third-largest cryptocurrency by capitalization. But by this moment, it has failed to meet expectations. Many in the crypto space are even wondering if the cryptocurrency token deserves mention. The past few years have been harsh for XRP price. Some experts are laying blame on Ripple Labs Inc.
Ripple Labs is the company strongly associated with the XRP token. Analysts are also beginning to wonder if the company is the source of the token’s problems. Notably, the CEO of digital asset trading fund Galaxy Digital believes that 2020 will be the same for XRP. Mike Novogratz says that XRPs’ problems stem from Ripples’ actions.
Ripple Owns a Lot of XRP Tokens
He was recently at the TD Ameritrade LINC 2020 conference. It took place at Orlando Florida in the United States. Mike was responding to questions from registered investment advisors. The last one was his opinion about XRP. Recording at the event was banned. However, sources indicate that Mike said:
“Ripple the company owns 60 billion of the coins, of the XRP. That’s a lot of it.”
This points to fears of market manipulation by Ripple Labs. Many have wondered if Ripple Labs has been manipulating the prices of its XRP tokens. Ripple’s executives have denied this severally. Ripple’s ability to sell massive amounts of its tokens points to some form of influence. This is the position of many skeptics of the sales process of the XRP tokens.
Mike compered XRP sales with stock sales. Reportedly, he said:
“When I’m buying a stock, if I know ( a person is) selling $10 billion worth of it at some price, it makes me less excited to buy the stock.”
This further gives that poor market sentiment exists as regards the cryptocurrency token.
XRP Underperformance Raises Fears
What makes Novogratz’s comments damming is its ownership of shares in Ripple Labs. Galaxy Digital’s largest shareholding in another company is in Ripple Labs. This is indicative of a loss of confidence by Galaxy in Ripple’s management. As of September, last year its holdings in Ripple Labs stood at $27.6 million. This is up from $23.8 million invested.
XRP has a market circulation of 100 million tokens. Ripple was given 80 billion of those as a “gift”. The company only has about 56 billion of those left. 48.9 billion are held in escrow. They can never be touched.
On its part, Ripple has responded vigorously to such comparisons. The company is already facing other troubles of its own. It has been involved in a lawsuit concerning sales of unregistered securities. This has been on for some years now.
It has also had to reduce its token sales to zero in the last quarter. 2019 was not a god year or XRP. It lost about 46.3% of its value. Novogratz believes that a similar situation will happen in 2020. He claimed:
“It did underperform immensely last year. I think it will underperform immensely again this year and it’s just because of the supply.”
Novogratz disputes the use of the word immensely. Sources indicate otherwise. Whatever the case, XRP appears to be in a for a bumpy ride this year. How well it performs remains yet to be seen.
At the time of tiling this report, XRP price stood at $0.27. This is an 8.69% increase within the past 24 hours. Coinspeaker has also reported about the recent 10% jump of its price.