The Influence of Ripple’s XRP Buybacks on Price
The impact of Ripple’s buybacks of XRP on its price has been a subject of discussion within the crypto community. One member, Crypto Mark, questioned the strategy of Ripple purchasing more XRP instead of distributing it. However, another member, Mr. Huber, explained that Ripple’s buybacks are beneficial for maintaining market liquidity. He emphasized that if XRP has a use for Ripple, buying on open markets is necessary.
Analysis of Market Patterns
Mr. Huber pointed out key patterns in the market, noting that sudden price spikes in XRP often coincide with Ripple’s buybacks. These spikes are then lost over time. He also mentioned that when Ripple buys $100 million worth of XRP within a few days, it triggers a price spike of around 50%.
Ripple’s Decreased Buyback Activity
Recent data from Ripple’s API shows a decrease in the company’s buyback activity. The sales volume for December 4 to 29 was twice the average of the past six months. Mr. Huber suspects that Ripple intends to push this down again with the next buyback.
Financial Magnitude for Market Movements
In response to a user’s question about the scale of investment needed for a substantial increase in XRP’s price, Mr. Huber stated that $100 million triggers a price swing of 30-50%. To expect a 2,000% increase, at least $4-6 billion in net purchases would be required.
Impact of Ripple’s Sales and Distributions
Mr. Huber compared Ripple’s sales and distribution strategy with other cryptocurrencies and concluded that the lack of demand is more responsible for price action than Ripple’s sales. He also highlighted that the supply of XRP has only increased by 22.73% more than Bitcoin’s supply over the past nine years.
Hot Take: XRP Trading at $0.63135
As of now, XRP is trading at $0.63135.
By
By
By