The conversation surrounding XRP has gained traction, especially after a recent video titled What is wrong with XRP challenged its viability as an investment. The video’s creator presented three primary criticisms of the popular cryptocurrency.
First, he argued that XRP’s intended purpose as an intermediary for cross-border payments is being overshadowed by stablecoins, which are now seen as more effective. With Ripple launching its own stablecoin, RLUSD, this perspective seems to be gaining momentum.
The second point raised concerns Ripple’s upcoming IPO, suggesting that this development undermines XRP’s role as a gauge for the company’s success in the crypto market. Finally, the author pointed out that Ripple possesses a considerable amount of XRP—over 38 billion coins—and that the company sells portions of it to finance its operations. This, they claim, diminishes XRP’s allure as an investment.
In response to these criticisms, Ripple’s CTO, David Schwartz, stepped in to clarify why XRP remains significant. He pointed out that while individuals do not need to hold XRP to utilize it for payments, it is crucial for someone to possess it as this supports market liquidity.
Schwartz asserted that the view presented in the video was flawed, emphasizing that even though transactions can occur without holding XRP, many still choose to do so. This decision protects them from potential volatility and supports the overall market structure.
He also challenged the idea that XRP’s price movements are solely influenced by changes within its ecosystem or market hype, illustrating his point with historical charts showing a correlation between the prices of XRP and XLM, another cryptocurrency. Schwartz indicated that the two assets exhibit a convergence in their value, reinforcing the notion that XRP is not just a simple peg but plays an integral role in the marketplace.
Ultimately, Schwartz highlighted the practical benefits of holding XRP. He noted that using it can reduce the necessity of frequent currency exchanges, streamlining transactions. Given the plethora of stablecoins available, holding XRP as a singular intermediary can be a rational choice, particularly when navigating through various payment requirements.
In summary, while debates about the future of XRP continue, Schwartz’s insights provide a compelling perspective on its relevance in the cryptocurrency landscape.
