Fidelity Investments’ Director of Global Macro sees bitcoin as “exponential gold” and “an aspiring player on the store of value team.” According to his analysis, bitcoin’s price is “driven primarily by the growth in its network, which is in turn driven by bitcoin’s unique scarcity feature, as well as the monetary and fiscal policy cycle, […]
Bitcoin News
XRP Continues To Struggle Below $0.5, Ex-Ripple Director Reveals Why Price Action Remains Muted
It is no longer surprising that the XRP price movement has stagnated around .5 in the past few months despite various positive developments for Ripple. This lackluster price action has left many XRP investors feeling wanting, especially considering the positive price action of other cryptocurrencies.
Sean McBride, a former director at Ripple, believes XRP is unlikely to register a significant breakout until Ripple’s ongoing lawsuit with the SEC concludes.
Ongoing SEC Lawsuit Weighs Heavily On XRP
Ripple’s legal battle with the SEC has been dragging on for over three years, and it continues to cast a dark cloud over XRP’s price. Ripple scored a partial win in July 2023 when Judge Torres decided that XRP to retail investors is not a security. This decision resulted in a temporary increase in the price of XRP to .90. However, the embattled crypto token now finds itself stuck below .50, unable to break out despite various rebounds and periods of dominance by the bulls.
A recent example of this repetition was observed in the past 30 days when a period of bull dominance saw XRP trading just above the .5 price mark for three weeks. However, like before, XRP’s price has failed to maintain its position above this level, and the crypto now finds itself trading around .48.
As McBride noted on social media, nothing significant will happen to XRP’s price until Judge Torres makes her decision. This is in relation to the pending decision on whether the sale of XRP to institutional investors qualifies as the sale of securities. According to the former Ripple director, a clear judgment from the judge would finally enable institutional investors to decide their stance on Ripple and XRP.
“Nothing significant is going to happen with the price of XRP until Judge Torres makes her decision,” McBride said. “This could open up the door for US institutions working with Ripple to ‘flip the switch’,” he continued.
I think I’ve mentioned this before. Nothing significant is going to happen with the price of XRP until Judge Torres makes her decision. So anyone expecting anything different is delusional. The next big piece of this is clear legislation in the US. Hopefully that is on the way…
— Sean McBride (@seanmcbride16) June 11, 2024
What Will It Take For XRP Price To Break Out of Its Slump?
Before XRP can truly break out of its slump, the lawsuit with the SEC must be resolved. As long as the case drags on, uncertainty will hang over the token and suppress the price. A settlement or victory for Ripple would remove this roadblock and likely send the price of XRP surging. Of course, XRP would need to outperform the market to compensate for lost ground over the past three years. However, a loss could deal a major blow to XRP and cause the price to plummet further.
According to one crypto analyst known as EGRAG CRYPTO, it is only a matter of time before all the rotational profits start flowing into XRP. This, in turn, would lead to XRP’s price breaking out of a descending triangle and pushing towards a target of .5.
Ex-Ripple Director Explains XRP Price Slide Amid Good News
Via X, Sean McBride, a former director at Ripple, offered an analysis of the perplexing downtrend of the XRP price despite a series of ostensibly positive developments surrounding Ripple and the XRP Ledger (XRPL). McBride’s insights come at a time when XRP’s underperformance in a bullish market continues to baffle investors and industry observers alike.
Why Is XRP Price Down Despite A Slew Of Positive News?
Despite recent bullish periods in the broader crypto market, XRP has notably failed to capitalize on these gains. In a conversation with X users, McBride attributed this lackluster performance to the ongoing legal battle between Ripple and the US Securities and Exchange Commission (SEC), highlighting the critical impact of impending judicial decisions on XRP’s valuation.
On July 13, 2023, Judge Torres’s ruling that XRP is not a security led to a temporary surge by 100% to .93, demonstrating the market’s sensitivity to legal developments. However, eleven months later, XRP’s price has halved, reflecting ongoing concerns about the possible long-term implications of the SEC’s actions and the potential for an appeal, which McBride acknowledges could happen unless the ruling is unfavorable to Ripple.
“Nothing significant is going to happen with the price of XRP until Judge Torres makes her decision. So anyone expecting anything different is delusional,” McBride explained, adding “once Torres makes her decision, I think we find out a bit more about what’s actually behind the curtain. This could open up the door for US institutions working with Ripple to ‘flip the switch’. We will just have to wait and see if that’s the case.”
Despite the overshadowing legal drama, Ripple has not been short on positive news. Recently, Ripple announced the creation of the XRPL Japan and Korea Fund on June 11, 2024, a significant initiative with an allocation of 1 billion XRP aimed at catalyzing the growth and development of the XRPL ecosystem in East Asia.
Additionally, Ripple’s strategic acquisitions have been notable. The company has successfully finalized its acquisition of Standard Custody & Trust Company. In May 2023, Ripple further expanded its services by acquiring blockchain firm Metaco for 0 million, and in April, it announced plans to launch a stablecoin aimed at bolstering the XRP Ledger ecosystem.
Commenting on these strategic shifts by Ripple, McBride noted, “Ripple is perfect, they don’t make any mistakes. Their executives fart rainbows. Everything they have done turns to gold. Wake the f*ck up people. If you think that’s how Ripple operates, you’re sorely mistaken. They are vocally self-critical, employees have backbone; disagree and commit. Ripple has changed their strategy many times.”
Notably, Ripple has been proactive in securing over 40 Money Transmitter Licenses (MTLs), necessary for its payment operations across the United States. “The next big piece of this is clear legislation in the US. Hopefully that is on the way with the recent developments in Congress and Trump’s commitment to Crypto (assuming he becomes President),” McBride remarked.
In response to a user’s inquiry about the likelihood of an SEC appeal if Ripple receives a favorable ruling, McBride commented, “Shouldn’t stop what’s happening in the US from happening, IMO, unless of course the ruling is not in Ripple’s favor.”
Addressing another user’s observation about a perceived shift in his tone regarding Ripple and XRP, McBride reassured, “No, not at all. I’m still very positive on Ripple and XRP. […] I’m a big fan, but that doesn’t mean I’m blind to the realities of what’s happening.”
At press time, XRP traded at .4818.
US Courts Have Serially Rejected Crypto Industry’s ‘Decade’s Worth of Arguments’ – SEC Director
Over the past decade, the U.S. Securities and Exchange Commission (SEC) has contended with “significant non-compliance” and “creative attempts” by cryptocurrency market participants to avoid its jurisdiction. According to the SEC’s enforcement director, the commission has regularly prevailed in its numerous court cases against these participants. A ‘Decade’s Worth of Arguments’ In the past decade, […]
Bitcoin News
Fidelity Director Analyzes Bitcoin Potential: Could It Hit $6 Trillion Market Cap?
In recent years, the debate surrounding Bitcoin’s (BTC) potential market share relative to gold has garnered significant attention, as recently approved Bitcoin Exchange-Traded Funds (ETFs) can bring Bitcoin significantly closer to gold in key metrics.
Jurrien Timmer, Director of Global Macro at Fidelity Investments, has put forward an analysis that sheds light on this subject. By examining the value of “monetary gold” and Bitcoin’s market capitalization, as well as considering the impact of halvings on Bitcoin’s supply, Timmer presents insights into the future dynamics of these two assets.
Gold Vs Bitcoin
Timmer’s analysis begins by estimating the share of gold held by central banks and private investors for monetary purposes, excluding jewelry and industrial usage. While this estimation is not exact, based on data from the World Gold Council, Timmer suggests that monetary gold accounts for approximately 40% of the total above-ground gold.
Drawing upon his previous calculations, Timmer posits that Bitcoin has the potential to capture around a quarter of the monetary gold market, with monetary gold valued at around trillion and Bitcoin’s market capitalization at trillion.
Timmer further delves into the impact of Bitcoin halvings on its price. Historically, halvings have had a substantial effect on Bitcoin’s value. However, Timmer raises the hypothesis that diminishing returns may occur in the future as the incremental supply of new Bitcoin decreases.
By comparing the outstanding supply and incremental supply of Bitcoin with those of gold, Timmer demonstrates that the diminishing impact of the halvings is likely to be more pronounced in the future.
As the number of coins available for mining dwindles, the influence of each subsequent halving event on Bitcoin’s price may diminish. This insight prompts Timmer to explore alternative ways to project Bitcoin’s price trajectory.
BTC’s Price Projections
To account for the diminishing impact of halvings, Timmer introduces the concept of a modified Stock To Flow (S2F) curve. This curve is derived by overlaying an asymptotic supply curve, representing the percentage of coins mined relative to the final supply cap, onto the original S2F curve.
Timmer proposes using a regression formula incorporating PlanB’s original S2F curve and the asymptotic supply curve as independent variables. This modified S2F curve aligns more closely with the supply dynamics of gold, reflecting a scenario in which Bitcoin’s scarcity advantage continues, but its impact on price gradually diminishes over time.
Using the modified S2F model and considering the supply characteristics of gold, Timmer generates hypothetical price projections for Bitcoin that place the cryptocurrency at approximately 0,000 by the end of 2024.
According to Timmer, if Bitcoin were to capture a quarter of the monetary gold market, it would represent a remarkable shift in the global distribution of wealth, which would gradually drive up the cryptocurrency’s price over the coming years.
Featured image from Shutterstock, chart from TradingView.com
Ex-Ripple Director Heralds ‘Big News’ For XRP, Can Price Respond?
Sean McBride, the former Director of Global Talent Acquisition at Ripple, has hinted at significant upcoming news for Ripple and XRP. McBride’s announcement, made via a post on X (formerly known as Twitter), has sparked a mix of excitement and skepticism among followers and investors alike.
His post stated: “Big news coming from #Ripple and #XRP in the next couple days,” setting the stage for speculation on what the news could entail and its potential impact on XRP’s market performance. However, the reaction to McBride’s announcement has been varied within the XRP community.
Big news coming from #Ripple and #XRP in the next couple days
— Sean McBride (@seanmcbride16) February 6, 2024
Wietse Wind, the founder of XRPL Labs—a company known for developing XRP Ledger-based projects such as XAMAN (formerly XUMM), a digital wallet, and Codius, a smart contract platform—responded with a hint of skepticism, implying concerns about insider trading:
Must be quite the news if it is worth entering insider trading territory.
Another community member, identified as Faisal, expressed a more cynical view, suggesting a pattern of temporary engagement with Ripple’s technology: “Another company using Ripple’s products as a ‘pilot program’ and then never actually using it after?” This sentiment reflects a broader skepticism that has occasionally surrounded Ripple’s partnerships and the actual adoption of its technology.
In response to the negative feedback, McBride’s retort was blunt: “Yeah, all you non Ripple shareholders can STFU because, yes, big news IS coming, already has come, and XRP is going to explode so piss off if you don’t have anything positive to say.” This statement indicates a strong belief in the significance of the upcoming news and its potential to positively impact the XRP price.
XRP Price Shows No Reaction (Yet)
As of press time, the XRP price has not shown any significant reaction to McBride’s announcement. This lack of immediate market movement may suggest that investors are adopting a wait-and-see approach.
In a technical analysis of XRP against the US dollar (1-day chart), the price shows a continuation within a descending channel pattern, indicating a bearish market sentiment. As of press time, the XRP price hovered around the .50 mark.
The chart analysis reveals that the price of XRP is currently struggling below several critical Exponential Moving Averages (EMAs) – the 20-day EMA at .52319, the 50-day EMA at .55345, and the 100-day EMA at .56877. This EMA positioning suggests a strong resistance level for any upward price movement. Furthermore, the 200-day EMA at .56220, although below the 100-day EMA, still acts as a potential resistance zone.
Volume indicators show a relatively stable volume with a slight increase in selling pressure, as denoted by the red volume bars. The Relative Strength Index (RSI) is at 36.08, which is close to the oversold territory, but not yet indicative of a strong reversal signal.
Notably, the price is trading near the 0.786 Fibonacci retracement level at .49894, a critical support level in the short term. This Fibonacci retracement is drawn from the major swing high at .74902 to the swing low at .43085. The price has already breached the 0.5 (.58993) and 0.618 (.55239) Fibonacci levels, which were previously acting as support levels, and is now testing the 0.786 level for potential support.
The descending channel pattern is defined by two parallel lines, with the price making lower highs and lower lows, which is typically seen as a bearish signal. For traders looking for a bullish reversal, a break above the upper boundary of the channel and the nearest EMA would be essential. Conversely, a drop below the 0.786 Fibonacci level could see the price test the .43085 level, which is the recent swing low.
‘Web3 Artists Offers Something Web2 Can’t – True Ownership’ — Palm Foundation Director
According to Andrea Lerdo, a director at the art-supporting organization, Palm Foundation, Web3 enables creators and artists to not only exercise control over their content but to connect with their respective audiences in a way not possible on traditional platforms. For artists who have already carved out a niche in the Web2 space, “Web3 offers something Web2 can’t – true ownership.”
Barriers Blocking Creators From Entering Web3
Lerdo, however, acknowledged that many small creators seeking to unshackle themselves from the “constraints of algorithms and opaque platform policies” by venturing into Web3 might encounter significant challenges. For instance, artists attempting to dabble with non-fungible tokens (NFTs) may be overwhelmed by the tech’s complexity or the initial costs.
To help make artists’ transition to Web3 less daunting, the Palm Foundation director urged players in this space to “provide accessible platforms, lower entry costs, and a supportive network.” She said doing this not only ensures artists’ success but also levels the playing field.
In her written answers sent to Bitcoin.com News via Telegram, Andrea Lerdo touted decentralized autonomous organizations (DAO) as one way artists can “incredibly” empower their respective communities. She argued that when these are properly set up, DAOs can help nurture “a community where everyone feels valued and heard.”
Below are the Palm Foundation director’s answers to the questions sent.
Bitcoin.com News (BCN): What makes you believe that creators and artists who already have a fan base on Web2 social platforms and are making good money want to tap into Web3 to support their art?
Andrea Lerdo (AL): Web2’s fanbase is controlled by centralized platforms like Meta or Tiktok, and mostly dependent on advertisement and algorithms to position their brand. Any change in the algorithm can significantly affect even the most popular Web2 influencers.
For creators who’ve already carved a niche in the Web2 space, moving to Web3 isn’t just about continuing what they’re doing; it’s about revolutionizing it. Web3 offers something Web2 can’t – true ownership. Having control over your content and connecting with your audience on a level that’s just not possible on traditional platforms. We’re talking about direct revenue, personalized digital assets like NFTs, and, most importantly, breaking free from the constraints of algorithms and opaque platform policies. It’s a game-changer for creators who want more from their digital presence.
BCN: Whether it’s sports franchises like Major League Baseball, NASCAR and WWE, or entertainment companies Netflix and Warner Brothers, a lot of big brands have been playing around with NFTs. The smaller artists don’t have the resources of big brands. What are the biggest challenges that small creators face when exploring NFTs and how to address them?
AL: Absolutely, the disparity in resources between small creators and big brands is stark. For these artists, stepping into the NFT and blockchain world can be overwhelming – the tech can be complex, the initial costs daunting, and the market, oh, it’s crowded. But here’s the thing: education and community support can make a difference. If we can provide accessible platforms, lower entry costs, and a supportive network, these artists can not only enter the space but truly thrive in it. It’s about levelling the playing field.
BCN: Can you tell us how your platform helps creative communities in Web3 to explore new possibilities in the digital art landscape?
AL: Palm Foundation is committed to democratizing art and technology, fostering creativity, and supporting artists. aims to empower and elevate historically marginalized creative communities in web3 by endowing critical education, providing opportunity, and amplifying the work of diverse creators on the Palm Network. On the education side, we have the Palm Academy which is a unique e-learning platform focused on Web3 education.
Unlike traditional digital academies, Palm Academy offers courses on topics like AI, art, business, and activism, catering to both beginners and professionals. Beyond just learning, students earn “Proofs” — non-transferable tokens that represent their achievements and contributions. Through initiatives such as ‘Calls for Art,’ whether internally or with partnerships, and grants for the best final projects of the courses at the academy, Palm Foundation seeks to create opportunities for artists to thrive and succeed in the digital age.
And now, The Foundation is launching the Palm Collective Tool that will enable creators to self-organize: leveraging a purpose-designed, open-source, on-chain governance as-a-service tool. Our vision is to empower individuals & communities to make decisions collectively, to manage their resources; to use their voice, to create positive change, and to practice self-determination.
BCN: Currently, creators with great Web3-native ideas have to develop custom products by themselves or pay a Web3 firm to do that. What do you think needs to be done to reduce barriers to entry and do you believe that the Web3 ecosystem is moving towards no-code?
AL: The current need for custom development in Web3 can be daunting for creators. However, the future lies in democratizing this space, which is where no-code platforms become pivotal. These platforms will enable creators to implement their Web3 concepts without extensive technical know-how, fostering a more diverse and innovative community. The transition towards user-friendly, no-code solutions is crucial for a more accessible and vibrant Web3 ecosystem.
And that’s exactly what we want to provide with the Palm Collective Tool.
The Palm Network initially had a PoA (Proof-of-Authority) mechanism that offered faster and cheaper transactions, but you’ve been migrating to zkEVM. Why?
The Palm Network initially used a Proof-of-Authority (PoA) mechanism to facilitate faster and cheaper transactions. This approach was effective for its initial goals, but the network has been migrating towards becoming a Polygon ZK Supernet, a process that involves a two-step migration.
The first step in this migration happened in August 2023, involving transitioning from the PoA mechanism to a Proof-of-Stake (PoS) chain. This change aims to enhance the network’s security and decentralization while maintaining efficiency.
The second step, planned for 2024, will transition the network into a ZK Supernet. This move is particularly significant as it will greatly scale the network’s capacity. The use of zero-knowledge proofs (zkEVM) in the ZK Supernet is a key factor in this transition. ZkEVMs are known for their ability to enhance scalability and privacy while maintaining Ethereum compatibility. This makes them highly efficient for processing complex operations, such as those involved in minting, trading, and collecting NFTs.
By becoming part of the Polygon Supernets ecosystem, the Palm Network aims to make NFT-related activities more accessible, benefiting from Polygon’s high speed, security, and scalability features. The move to zkEVM is thus a strategic step to align with the growing demands in the realms of creators, sports, and entertainment, ensuring that the network remains competitive and capable of handling increased transaction volumes and complex operations with improved efficiency and security.
BCN: When one talks of communities in Web3, decentralized autonomous organizations (DAO) tend to become a part of the conversation. Does it make sense for individual artists and creators to form a DAO or sub-DAO to help govern their communities?
AL: When we discuss communities in the Web3 space, DAOs (Decentralized Autonomous Organizations) often come up, and rightly so. The idea of DAOs resonates deeply with the ethos of Web3 – decentralization, collective governance, and shared ownership. Now, for individual artists and creators, the concept of forming a DAO or a sub-DAO to manage their communities can be incredibly empowering.
Think of it this way: artists traditionally have had a one-way relationship with their audience. But in a DAO, this dynamic shifts. It becomes a collaborative, interactive community where members, not just the artist, have a say in key decisions. This could be about the direction of the artist’s work, merchandising, exclusive content releases, or even community-driven projects.
For creators, this model doesn’t just build a community; it creates a sense of belonging and investment among the members. However, it’s important to note that DAOs require a level of commitment and understanding of how decentralized governance works. It’s not just about setting it up; it’s about nurturing a community where everyone feels valued and heard.
So, does it make sense for individual artists to form a DAO? Absolutely, if they’re ready to embrace a more inclusive, democratic approach to community engagement. It’s a step towards redefining the creator-audience relationship, making it more dynamic, interactive, and mutually beneficial.
What are your thoughts about this interview? Let us know what you think in the comments section below.
Vaneck Director: People Tend to Underestimate Long-Term Impact of Spot Bitcoin ETFs
Vaneck’s director of digital assets strategy has explained why people tend to underestimate the long-term impact of spot bitcoin exchange-traded funds (ETFs). He believes that upon the approval of a U.S. spot bitcoin ETF by the Securities and Exchange Commission (SEC), “bitcoin’s price trajectory could follow gold’s blueprint from 2004 and the years after, just much faster.”
Market Impact of Spot Bitcoin ETFs
Vaneck’s director of digital assets strategy, Gabor Gurbacs, shared his predictions regarding the long-term impact of U.S. spot bitcoin exchange-traded funds (ETFs) on social media platform X Sunday. Vaneck is among the asset management firms that have applied to launch a spot bitcoin ETF with the U.S. Securities and Exchange Commission (SEC).
While noting that in his view, “people tend to overestimate the initial impact of U.S. bitcoin ETFs,” which he expects to be only a few hundred million dollars in mainly recycled funds, the Vaneck director said:
Long term, people tend to underestimate the impact of spot bitcoin ETFs.
“People tend to hype the current thing but remain myopic about the big picture. Bitcoin is forcing its own capital markets systems and products well beyond the ETF and that’s not priced in. The question is not what Blackrock adopts, but what Bitcoin company is the next Blackrock,” he opined in a follow-up post.
“If history is any guide, gold is worth studying as a parallel,” Gurbacs continued. He then referenced his post made on Dec. 6 which details why the approval of a U.S. spot bitcoin ETF may create trillions of dollars in value for bitcoin.
He explained that the SPDR Gold Shares ETF (GLD) was introduced on Nov. 18, 2004, noting: “In the subsequent 8 years gold’s price quadrupled+ from 0 to ,800 adding ~ trillion in market cap going from ~ trillion to ~ trillion.”
The Vaneck director emphasized:
Bitcoin’s market cap is ~0 billion today, less than 1/3rd of what gold was in 2004. In my view, upon the approval of a U.S. spot bitcoin ETF, bitcoin’s price trajectory could follow gold’s blueprint from 2004 and the years after, just much faster.
“I also believe that only a few billion will come from bitcoin ETP [exchange-traded products] adoption and it won’t come all at once,” he added. Nonetheless, Gurbacs pointed out that “the boost will be significant,” given “a relatively low bitcoin float (strong hands/long-term holders)” and “systematic scarcity via halving schedules.”
In addition, he stressed that “the ETF itself will legitimize and destigmatize bitcoin’s place in portfolios leading to further adoption outside the ETF.” The Vaneck director further predicts that “nation states and sovereign wealth funds will hold their bitcoin directly and secure optionality for mining and their own bitcoin-based capital markets.” He noted that “central bank gold adoption outside of ETPs drove a good chunk of gold’s price increase, but the ETPs were quintessential to get comfortable with gold.)”
Do you agree with the Vaneck director about the impact of spot bitcoin ETFs on bitcoin? Let us know in the comments section below.
SEC’s Cash Only Restriction for Spot Bitcoin ETF Is Nonsense, Says Vaneck Director
A director of digital assets strategy at asset management firm Vaneck says the U.S. Securities and Exchange Commission (SEC)’s cash-only requirement for spot bitcoin exchange-traded funds (ETFs) is “nonsense.” He predicted that it would not hold out for long since publicly listed companies already hold billions of dollars in bitcoin on their balance sheets.
‘The Cash-Only Create/Redeem Requirement for the Bitcoin ETPs Is Kabuki Theatre’
Gabor Gurbacs, director of Digital Assets Strategy at asset management firm Vaneck, thinks it’s “nonsense” for the U.S. Securities and Exchange Commission (SEC) to require spot bitcoin exchange-traded fund (ETF) issuers to use the cash creation method instead of the in-kind model for their crypto exchange-traded products (ETPs). The executive stated on social media platform X Thursday:
The cash-only create/redeem requirement for the bitcoin ETPs is Kabuki theatre … It’s nonsense to restrict bitcoin ETPs to cash only.
“Publicly listed companies already hold $ billions of bitcoin on their balance sheets, some transferred from trading platforms, others mined, etc.,” he added.
The Vaneck director proceeded to praise Hong Kong for allowing both the cash and in-kind models for spot bitcoin ETFs. “Gotta love that even Hong Kong SAR (China) is more open-minded than U.S. regulators. The competition is on. Relaxing rules will lead to a capital/competitive advantage,” the director opined. This week, the Hong Kong Securities and Futures Commission (SFC) published rules for funds to launch spot bitcoin ETFs using both the cash and in-kind methods.
The SEC is currently considering 13 spot bitcoin ETF applications, including one from Vaneck. The securities regulator recently held several meetings with various issuers, pushing for them to use the cash creation method if they want to be included in the first batch of spot bitcoin ETF decisions.
Gurbacs further shared:
Given that public companies hold bitcoin from various sources, I wouldn’t expect cash-only creates to hold out for too long. In-kind creations and redemptions are simply much more efficient and better for investors … Issuers will fight for it.
What do you think about the statements by Vanceck’s director of digital asset strategy? Let us know in the comments section below.
Former Director Says Ripple Can Burn 40 Billion XRP In Escrow, How Will This Affect Price?
The possibility of Ripple ‘burning’ its escrowed XRP funds has come up for discussion. This development could become a major talking point as the XRP community continues to clamor about XRP’s tepid price action.
Can Ripple Burn Its Escrowed XRP Funds?
In a post on his X (formerly Twitter) platform, former Ripple Director Matt Hamilton suggested a way in which Ripple could potentially ‘burn’ its XRP holdings in escrow lockups. He stated that Ripple could disable the master key on the destination account, which usually receives these escrow funds.
Hamilton believes that this achieves the same purpose for which tokens are burned, considering that they become inaccessible to anyone when they are released from escrow. His statement formed part of a larger discussion among some members of the XRP community on what to do with the escrowed funds if there was a need to get rid of them.
Crypto sleuth Mr. Huber had also weighed in on the discussion as he stated that Ripple can’t burn these escrowed funds as the decision isn’t theirs to make. Ripple will apparently need the approval of validators on the XRP Ledger before they can make such a move.
From the discussion, one could see that they were alluding to the escrowed funds possibly being encoded on the XRP Ledger. As such, Ripple will need the permission of these validators to alter the code and burn those funds. However, Hamilton’s comment was more focused on Ripple burning these funds by simply disabling access to the destination account.
Ripple Burning Escrowed Funds And Its Significance
Ripple burning their escrowed funds is something that could easily pique the interest of the XRP community. This is true, especially considering recent talks about Ripple deliberately suppressing XRP’s price. As such, there could be shouts for Ripple to burn some of these tokens to show its commitment to XRP’s growth.
However, from all indications, this isn’t a straightforward process, and there is no guarantee that it will affect XRP’s price. At some point in the discussion, XRP YouTuber Moon Lambo alluded to the fact that Ripple’s XRP holdings aren’t part of those in the open market. It has also been reported that Ripple’s XRP transactions do not impact prices on crypto exchanges.
Therefore, there is the likelihood that Ripple burning their XRP holdings (the escrowed funds in particular) might not impact XRP’s price on the open market. Ripple probably knows this, and that is why they haven’t made such a move. Instead, to provide stability to XRP, they return most of their unlocked tokens to escrow.