- A widely followed analyst shares his insights into the key narratives driving the XRP FUD.
- He explains that the token remains integral to Ripple’s operations, and that most of the company’s valuation is tied to it.
- Onchain data also shows that Ripple is not actively selling XRP; instead, it remains the top buyer of the token.
Ripple has been making significant progress in forging partnerships with major institutions and in securing their adoption of its cross-border payment solutions. Despite this, the FUD (Fear, Doubt, Uncertainty) mill has also been working nonstop to discredit these developments, and some are even questioning the company’s commitment to XRP.
Critics, or rather random people on the internet, claim that Ripple is only promoting its company and Ripple USD (RLUSD) stablecoin, leaving XRP behind. However, Edo Farina, founder of Alpha Lions Academy and Head of Adoption at XRP Healthcare, has recently dismissed the unfounded allegations, citing the company’s official statements to support his arguments.
XRP is an Integral Part of Ripple
The analyst highlighted that Brad Garlinghouse, CEO of Ripple, stated in a social media post in October, “XRP sits at the center of everything Ripple does.” This alone is a clear indication of the establishment’s symbiotic relationship to the token and its chain, the XRP Ledger (XRPL).
Additionally, Garlinghouse said that the digital asset complements Ripple’s existing infrastructure, supporting XRP treasury firms and newly acquired businesses. XRP notably powers both Ripple Payments, including its on-demand liquidity (ODL) layer, and the RLUSD stablecoin since the company built them on XRPL. The chain burns XRP during transactions.
Moreover, the blockchain solutions provider derives most of its valuation from its XRP holdings, making them an integral part of its business. Hence, as we discussed in our previous article, Ripple cannot abandon XRP or ignore it, because its crash would also risk diluting its overall valuation.
Why Ripple is Not Actively Dumping the XRP It Receives From Escrow
Furthermore, Farina tackled the misconceptions about Ripple’s XRP escrow mechanics. According to him, the crypto community is rife with speculation that the company is flooding the market with the token whenever its escrow executes its staggered monthly unlocks.
The analyst explained that the escrow unlocks are not merely a quick profit-making scheme for Ripple, as they serve a fundamental purpose in its business. The escrow unlocks are essential for liquidity management, as XRP was built as a neutral settlement asset. It echoes the previous comments of Monica Long, President of Ripple, that the token serves as “a vital bridge asset for more complex currency flows,” and is tailored for “long-tail corridors with lower liquidity.”
To drive his point home, the Alpha Academy founder emphasized that Ripple has remained the largest buyer of XRP in open markets since 2019, even amid the US Securities and Exchange Commission (SEC) lawsuit. This underscores the asset’s demand on the ODL platform and in processing institutional flows.
Farina advised investors to follow the trail of XRP wallets, as they clearly indicate that Ripple is not actively selling a huge chunk of its holdings into centralized exchanges. In fact, the founders’ wallets, including those of Chris Larsen and Arthur Britto, are moving a significant amount of their supply to the company’s ODL. It’s worth noting that the latter hadn’t sold any of his XRP since their acquisition based on onchain data.
XRP’s Rising Demand Amid Tightening Supply
The analyst surmised that the scenario in which Ripple is now tapping into its founders’ suggests an exponentially rising demand for the digital asset, especially with the launch of spot XRP exchange-traded funds (ETFs). This is despite the trend not immediately translating to an appreciation in the token’s price.
Nonetheless, Farina is confident that once XRP’s price reflects the tighter supply amid rising demand, it will be too late for most retail investors to buy the asset at its prevailing single-digit US-dollar value.
Disclaimer: The analysis and commentary featured in this article are only for informational purposes. They do not constitute financial advice or a product recommendation from the author or the Blockzeit team.
