$12.5 Million in XRP Moved From Bithumb Amid Tokenomics Concerns

BeInCrypto has previously reported on several potentially bullish Ripple news events throughout 2019. Significant partnerships, such as that with MoneyGram, along with large acquisitions have excited those most optimistic for the divisive digital asset’s future. Just today, the Twitter-based, large cryptocurrency transaction signal account Whale Alert (@whale_alert) reported that 64,000,000 XRP had been transferred from the exchange Bithumb to an unknown wallet. At today’s prices, the total dollar value of the transaction is almost 12.5 million.

🚨 64,000,000 #XRP (12,477,863 USD) transferred from #Bithumb to unknown wallet

Tx: https://t.co/B0HrwFXYk8

— Whale Alert (@whale_alert) December 30, 2019

A glance at an overview of Ripple’s 2019 would suggest that the company’s associated cryptocurrency would be flying high too. However, the XRP price has spent most of the year in a state of decline. Whereas Bitcoin has increased over the last 12 months by almost 100 percent, XRP has plummeted by around 46 percent. Cryptocurrency market analyst and founder of Quantum Economics, Mati Greenspan, believes that the poor price performance is the result of two factors relating to the coin’s “tokenomics.”

Talk about making a mountain out of a mole hill.

To all the Ripple fanbois: Looks like your argument skills have improved but unfortunately the tokenomics have not yet.
https://t.co/BB0pqMpQoE

— Mati Greenspan (tweets ≠ financial advice) (@MatiGreenspan) December 30, 2019

Although Greenspan is still overall bullish on both XRP and Bitcoin, he argues that selling pressure from Ripple itself and the fact that financial institutions do not need to buy XRP at all to use Ripple services have both been contributing to the asset’s poor performance. BeInCrypto has reported on numerous previous occasions about Ripple dumping the holdings it awarded to itself upon the creation of XRP on the open market. With the company still controlling a substantial number of XRP, this trend seems likely to continue into the new year. In response to a question about the level of selling pressure, Ripple can exert on the market in the coming months, Greenspan wrote:

“… they have the ability to sell up to 1 billion tokens in any given month. That alone can damage the market’s psyche, whether or not they exercise it.”

The second factor limiting the price growth of XRP for Greenspan is the fact that companies opting to use Ripple services can do so without the network’s native cryptocurrency. Ripple offers its clients a range of money transfer services – some using XRP and some not. Rppl.info lists those banks making use of the network in some way, and an overwhelming majority are already using xCurrent, a real-time gross settlement system that does not rely on XRP. Even the company’s On-Demand Liquidity service, launched earlier this year, only gives an option to use XRP. Greenspan refers to this as “adoption issues w/in the network.”