Jump to content
Sign in to follow this  
dr_ed

What Is Different About XRP?

Recommended Posts


I have this theory about XRP that I'm developing.....please debunk it. I'm just thinking out loud here. I value your input, especially you traders.

 It comes from a place of trying to get a handle on the way XRP stays stuck in the current channel, price-wise. 

In a famous Sherlock Holmes story, "The Curious Case of the Dog that Barked in the Night" a clue comes to Holmes and Watson in the form of a dog that SHOULD have been heard barking, but was strangely silent. That's how I'm  thinking about XRP.  What things should or could be moving XRP price...things that move other coins, but that are absent in this particular case?

The argument has been made that Ripple is manipulating XRP price to keep it down. I don't think that argument holds water. But what if the price is staying low because of something different? Something Ripple is NOT doing.

So....my theory is that XRP price is stuck, and it's stuck not because of something Ripple is doing, but rather by the ABSENCE of a behavior that moves BTC (and by extension, most other cryptos).

The difference is that the vast majority of XRP is in strong hands that see the benefit in NOT manipulating price at all, but rather letting the market find the price for the asset. 

 My view right now is that BTC is and has been manipulated by various whales and miners for their own benefit, for years..... Witness the BTC pump of last week. We had this critical moment...the chart was in a long sideways consolidation.....it needed to break to  the upside or to the downside. To me, it was looking like it would break down...and in the middle of the night while I was sleeping, one whale (Bitmain has been accused) made some huge buys that made BTC break up.

 This is just a snapshot of one moment in time...but it was a critical moment, and whoever made that $100M buy knew that very well.  The chart needed to break the descending trendline from December to signal a bottom. Somebody made that happen.

Why didn't it just break down the next day? Because thousands of traders and hodlrs reacted to the signal and came into the market on the technicals.....it became a self-fulfilling prophecy.

Compare to XRP....it is true that there is a lot of XRP in circulation...but maybe only 20B or less real available supply. There are lots of dedicated hodlrs who have held on through the bear market even, and now have no real impetus to sell, other than capitulation and loss of faith.  And XRP hodlrs are pretty faithful.

Ripple has lots of good reasons to be very hands off. I view them as excellent stewards of XRP, and I can see that they need to be seen as very straight-arrow and above board. The regulatory hurdles need to be cleared. They need to pass the sniff test for the stodgy banking cartel that are their potential clients.

Another factor is that it isn't necessarily as easy to manipulate XRP as it is BTC. Whales own big chunks of the BTC supply that they got at much lower prices than even today's price. Nobody but Ripple owns a HUGE chunk of XRP. Well, Jed does, but he is restrained by some kind of agreement not to dump into the market.

That leaves one group of potential manipulators, and that would be the exchanges themselves.  I think they tend to do smaller manips that don't take out as many stops and break through resistance (or support) in the way  BTC whale manips can. At least that's my working theory. It looks to me like MUCH more XRP is now on the exchanges than 5-6 months ago. I don't have a number and I'm not sure if anyone has estimates on just how much.

If I'm even somewhat correct in my assumptions, then we might see this phenomenon change as circulating supply INCREASES, which might seem counter-intuitive.  This is a different kind of driver than what I call the "low float" scenario, which argues that at some point XRP price will spike on scarcity, just as adoption takes off. ( I value that idea, fwiw, but it might be further along in the future.)

The main take-away from all this, assuming there is some merit to my thinking,  is that we might continue to see more of the same for a while.  But it's important to understand that it has nothing to do with the fundamentals that support adoption and eventual dominance of XRP. It's just an explanation of why XRP is currently stuck.

Another take-away would be that XRP is likely to remain highly  correlated to BTC for now, at least.. Until something fundamentally changes. 

Edited by dr_ed

Share this post


Link to post
Share on other sites

I'm zero for about three tries on starting discussions on XRPChat....would somebody check my anti-perspirant?

Just kidding.....but I'm still hung up on this topic, so I'll have a conversation with myself for the moment. Just more thinking (good or bad, you decide) on why XRP price is stuck.

The clients are banks. For XRP to appreciate in price, the client banks theoretically need to buy and keep fairly large liquidity pools of XRP. Yes? I think so. Many people say so.

If you were a banker. would you be more likely to spend $100M and get a whopping 300M XRP or spend the same $100M and get 100X less after the price goes from 33 cents to 33 dollars? It's definitely in the client's interest to be able to buy in cheap. Right? How could it not be?

 Who do you think Ripple wants to make happier? Us...or their clients? This much seems like a no-brainer to me. If what Ripple wants is wide adoption, then they have a vested interest in seeing that the early adopters (at least) get in ahead of the crowd. It's a powerful incentive. Later, when they have revenue out the yin-yang, and everybody is using XRP.... that won't be as important.

But...I do stand by my previous statement that in order to keep XRP price low, the thing Ripple is doing is basically NOTHING. They merely are NOT pumping. Not true of BTC, which is manipulated all over the map. After a lot of study, that's what I came up with...the reason BTC pumps and dumps is because whales can do it, and profit from it, in both directions. So it happens a lot.

The only people who own THAT much XRP are NOT motivated to profit from pump and dump market mechanics and algo trading. They need XRP to look like the Anti-Bitcoin......squeaky clean, conforming to regulatory norms. No cocaine residue. You have to be a real whale to pump markets like BTC got pumped last week.

You'd a need something like a BILLION XRP (please school me if you know it would be more.....or less...that's an estimate) to accomplish the manip (the 20K BTC buy) that moved the whole market up 20%.. As of now, only the Ripple founders have bags big enough to pull something like that off. And they don't play that game.

 

Share this post


Link to post
Share on other sites

Interesting thread guys.  I don’t claim to know the answer here -just chiming in...

I do think it is related to the circulating supply.  We all know the circulating supply is actually 100billion.  While most are locked up with Ripple, these are being used/sold for various endeavors - let’s call it OTC sales.

There is so much liquidity for XRP as well which I think makes it less able to be manipulated.  I like many other coins whose supply is far lower and liquidity is far lower.

Many of these other coins like ADA have a trade volume 1/10th that of XRP and liquidity is far lower.  ADAs actual supply is 1/4 that of XRP.  I use ADA as an example as I have been swinging it.

I don’t think XRP is being manipulated as the supply and liquidity is so large - and the real “whale” is Ripple who is bound to escrow and regulatory agencies to do this right and thus are not and will not play in whale games we see elsewhere.  All of this is being established to build the internet of value.  And for now the prices seem relatively stagnant.  That is until the internet of value rails are established and churning.  Even then I have no idea what we may see for market value of XRP but I think that liquidity providers will be needing to shore up large stashes of XRP to provide the services they will provide.

The other thing to add...is that the perception of XRP in this ecosystem is that it is considered a bankers coin and centralized coin.  And for that reason alone many will never hold this coin.  Bitcoin is a bet against the banks and the failure of monetary systems.  

I personally hold XRP as a hedge against Bitcoin and that the people that control money flows will end up using XRP As opposed to bitcoin.  

 

i am not trading XRP, just building a long stash.  It is more exciting to trade other assets - for the reasons above.  The long game however requires a lot of patience with XRP....that wait for this asset’s ecosystem to mature and become more operational could be years.

Edited by Excerpts

Share this post


Link to post
Share on other sites

I cannot read charts. From a layman's perspective, XRP is quite similar to Oil.

~60% of XRP Supply is controlled by Ripple VS 40% of Oil supply is controlled by OPEC (Organization of the Petroleum Exporting Countries)

So unless Ripple (OPEC) wants XRP price (oil price) to go up, then it will go up? I wonder if Ripple is working with banks so that they can join to become another OPEC. Maybe the same strategy, just with a different asset.

Share this post


Link to post
Share on other sites

Couple of thoughts I've had and this seems as good a place as any to share them:

  • Ripple cannot be seen in any way to have any control over the price of XRP so are going to be hands off in that respect
  • However, there are benefits in the price of XRP being higher as you need less XRP to transfer larger amounts of value (avoiding issues with moving the market with huge buys and sells and slippage)
  • There is a psychological barrier to deal with if the asset you're using to make cross border payment fluctuates wildly in value - I know you only need to hold it momentarily whilst making the transfer but nobody is going to touch it if changes massively in value on a daily basis - at a lower price, the % change in value is more significant, another reason why Ripple would want the price to be higher
  • For XRP to be successful, Ripple need to create an ongoing and constant demand for it. It only works for cross border transfers when there is a buyer at the other end (someone with fiat who wants to exchange it for XRP because they need it or want to hold it). This needs to be continuous and ongoing. If there is no compelling reason to hold XRP then it will fail as a project. This unfortunately presents a chicken and egg scenario - the price of XRP will only increase if there is an increasing demand for it, but unless the price increases, there won't be any demand for it.

Put all that together and what do you have? Setting aside conspiracy theories, bots, manipulation and whales, Ripple ultimately need the price of XRP to increase slowly and gradually over time. I guess thats what they're attempting to do with Coil / Xpring etc but I've come to the conclusion that XRP is not going to "moon" overnight. It would be the worst thing that could happen for institutional, wide scale adoption.

Share this post


Link to post
Share on other sites
11 hours ago, Excerpts said:

Interesting thread guys.  I don’t claim to know the answer here -just chiming in...

I do think it is related to the circulating supply.  We all know the circulating supply is actually 100billion.  While most are locked up with Ripple, these are being used/sold for various endeavors - let’s call it OTC sales.

There is so much liquidity for XRP as well which I think makes it less able to be manipulated.  I like many other coins whose supply is far lower and liquidity is far lower.

Many of these other coins like ADA have a trade volume 1/10th that of XRP and liquidity is far lower.  ADAs actual supply is 1/4 that of XRP.  I use ADA as an example as I have been swinging it.

I don’t think XRP is being manipulated as the supply and liquidity is so large - and the real “whale” is Ripple who is bound to escrow and regulatory agencies to do this right and thus are not and will not play in whale games we see elsewhere.  All of this is being established to build the internet of value.  And for now the prices seem relatively stagnant.  That is until the internet of value rails are established and churning.  Even then I have no idea what we may see for market value of XRP but I think that liquidity providers will be needing to shore up large stashes of XRP to provide the services they will provide.

The other thing to add...is that the perception of XRP in this ecosystem is that it is considered a bankers coin and centralized coin.  And for that reason alone many will never hold this coin.  Bitcoin is a bet against the banks and the failure of monetary systems.  

I personally hold XRP as a hedge against Bitcoin and that the people that control money flows will end up using XRP As opposed to bitcoin.  

 

i am not trading XRP, just building a long stash.  It is more exciting to trade other assets - for the reasons above.  The long game however requires a lot of patience with XRP....that wait for this asset’s ecosystem to mature and become more operational could be years.

Just some food for thought.

Messari has XRP  "liquid supply" now at roughly 22B and has a 2nd number for actual "circulating supply", which is only about 15.4B.

So....if you believe that (and I think it's the best estimate) then XRP has almost exactly 1000X the supply of BTC at this moment in time.

So if BTC is worth the $5K price it commands right now...and if one considered XRP to be equal in value, that would get you to a price of $5. for XRP RIGHT NOW.

My view is that it would be very reasonable to see a quick move to this level when some smart person figures this out.

Share this post


Link to post
Share on other sites
1 hour ago, googie said:

For XRP to be successful, Ripple need to create an ongoing and constant demand for it. It only works for cross border transfers when there is a buyer at the other end (someone with fiat who wants to exchange it for XRP because they need it or want to hold it). This needs to be continuous and ongoing. If there is no compelling reason to hold XRP then it will fail as a project. This unfortunately presents a chicken and egg scenario - the price of XRP will only increase if there is an increasing demand for it, but unless the price increases, there won't be any demand for it.

 

15 hours ago, dr_ed said:

The clients are banks. For XRP to appreciate in price, the client banks theoretically need to buy and keep fairly large liquidity pools of XRP. Yes? I think so. Many people say so.

If you were a banker. would you be more likely to spend $100M and get a whopping 300M XRP or spend the same $100M and get 100X less after the price goes from 33 cents to 33 dollars? It's definitely in the client's interest to be able to buy in cheap. Right? How could it not be?

You may have skipped a step or two.

Before we get to the point where banks are using XRP, we first need to to hit the remittance market.

Ripple's plan is to get into the remittances first. It was not always the case.

Here is the recipe to get started:

High volume + Low value

The word is actually spreading now and we see those remittance apps popping everywhere now. There already was a lot of competition before blockchain in this market, but what Ripple is bringing to the table is groundbreaking, and the companies (from this market) are adopting it.

Only after decent usage we can expect the price to have an healthy increase.

Then the small and medium sized banks will line up.

As to who will hold XRP, I don't know yet. The general idea is market makers will hold them and, when a bank needs to process a cross border transaction they will buy and sell from the market makers, who will profit from a tiny spread. I am really not sure about this scenario, it's a bit foggy in my head still so don't take my word for it.

Also, the correspondent banks could potentially become the market makers and hold XRP.

Edited by JannaOneTrick

Share this post


Link to post
Share on other sites

There are a couple of things here that I think need to be mentioned. There is a real future price for XRP that will be found through market action following wide adoption, when that is a real thing, which I think it will be. I think that's the number you're calculating, @JannaOneTrick

There is another number, which for lack of a better term I will call  "2019's best estimate of XRP price".  The market is not yet able to assess this number, because as of now, there is no set of accepted metrics for determining what that number is...but with more upward pressure on the crypto market generally and more large investors coming in, this kind of metric will be developed...trust me, that's what Robbie Mitchnick is being tasked with at BlackRock...as well as others like him working elsewhere.

Many stocks and other assets with great potential trade at large multiples to their pre-revenue  real-time values, because early investors clearly see how to gauge the future...supply, float, revenue (which is guessed at before it even occurs.) Nobody waits until real revenue is happening to determine a stock price in today's world. You'd be left in the dust.

Right now, those who say the huge supply is what is holding the price down are SOMEWHAT correct in my view, but the real issue is that there is no trusted metric to measure XRP's potential value against any other  known value.

In the cryptoshpere, today (whether we like it or not),  the EASIEST thing to do to get a quick back-of-the-napkin estimate for a crypto price is to compare it to BTC, whether or not it makes sense to the better informed crowd.  Other than Robbie's paper (source of the Athey app) that's about all there is, and it's way easier to understand than Mitchnick's paper, which is fairly dense to me (but hey, I only got a minor in math).

So....I fully expect that within a few months, you will read some article that does the same over-simplified comparison to BTC I just made, and that people will USE that to decide what to spend for XRP...unless something better is developed. 

Edited by dr_ed

Share this post


Link to post
Share on other sites

Although it really isn't talked about much, the same problem of pricing exists for TRX, ADA, VET, and all the other pre-mined coins. Right now they're all moving in correlation with BTC and occasional hype related FOMO. But better tools are needed, and they will come. They have to..... if the real large, more conservative pension funds decide to enter the crypto market following regulatory guidance. I'm not saying these tools will be perfect, but people who play with other people's money need to have a clear rationale for putting client's money into higher risk assets.

Edited by dr_ed

Share this post


Link to post
Share on other sites
2 hours ago, dr_ed said:

Messari has XRP  "liquid supply" now at roughly 22B and has a 2nd number for actual "circulating supply", which is only about 15.4B.

Interesting..could you please share this link/reference ...thanks

Share this post


Link to post
Share on other sites
12 hours ago, jockeyng said:

I cannot read charts. From a layman's perspective, XRP is quite similar to Oil.

~60% of XRP Supply is controlled by Ripple VS 40% of Oil supply is controlled by OPEC (Organization of the Petroleum Exporting Countries)

So unless Ripple (OPEC) wants XRP price (oil price) to go up, then it will go up? I wonder if Ripple is working with banks so that they can join to become another OPEC. Maybe the same strategy, just with a different asset.

Lots of people can't read charts.  In the world of markets, people who CAN read charts are called "technical analysts"  and people who CAN'T read charts who still might know something worth knowing are known as "fundamental analysts". 

People tend to gravitate into two different camps around that basic idea of having those two ways to gather information. I see that going on even in the crypto community.

I have some ideas about that. How people often start out looking at fundamentals, but then turn to TA in order to survive in a cut-throat world full of cold-hearted traders and algorithms and bots.......and then once they learn how to read charts, they abandon fundamentals altogether. A few old dogs like to consider both......

Too much information? Probably.

This thread  IS about the fundamental analysis of XRP, however, so you really fit right in.  Welcome to the thread. 

Thanks for the insight on the nature of cartels. One market I've never traded is oil, because I could never figure out where the hell oil price was going, using either TA or fundamentals. Maybe the cartel angle is part of why I couldn't figure it out. 

Edited by dr_ed

Share this post


Link to post
Share on other sites


I've looked at every video ever made on XRP price  (well maybe not all, but all the reality based ones) and my current view is that right now, XRP price should be about 5 bucks, based on an assumption that (a) XRP value is at LEAST equal to BTC...and (b) that the actual circulating supply is almost exactly 1000X greater. So if BTC=$5K.....then XRP is worth $5...right now. A very simple back-of-the-napkin valuation, but easy to understand and hard to debunk, imho.

So, I would NOT be surprised to see a rapid appreciation to the $5 level as soon as the mainstream financial houses are happy that we have regulatory clarity.

And yes, in a broad bull run that takes BTC  up 10X, I'd expect XRP to go up 10X too. Five bucks to 50 bucks. Because we are not going to be (my educated guess, anyway) at the point where adoption is the primary driver of price in the coming bull. It's coming too soon. It will be a bitcoin driven rally, just like the previous ones....perhaps the LAST crypto rally that is so correlated to BTC.

Adoption of XRP (my personal thesis, recently developed) will cause the BTC/XRP correlation to break down AFTER  the coming rally...that will come, and the long term hodlrs will finally be really vindicated, but I expect THAT in 5-8 years, based on a 4 year market cycle, with a bear market happening again before XRP becomes the dominant crypto due to its use as a valuable currency for a variety of uses.

I'm saying this here and now, after studying cryptos for my own education in a serious way for half a year.....it IS a price prediction, one I'm now very comfortable with, and so I won't be speculating on price for a while. I'm putting this up here, deliberately taking a chance on being wrong and letting anyone who reads this in a year or five years have a good laugh. I'm doing that because if I am at least somewhat correct in my view, that perhaps my  WAG (wild ass guess) will get at least the same level of respect as those who divine price using puzzles and listening to bears.

As always, we shall see....reality always wins.

Edited by dr_ed

Share this post


Link to post
Share on other sites
36 minutes ago, dr_ed said:

actual circulating supply is almost exactly 1000X greater

your calculations seems to be a little bias towards XRP :),  if you want to do this kind of comparisons you could do it fairer 

XRP circulating supply is actually close to 2000X, that would make your actual expectation based on current supply more like XRP at 2.1$, not 5$, when Bitcoin is at 5k$

Also if you think Bitcoin and XRP should have similar value currently, I think you could also look at total supply, 21 million vs 100 Billion,

in that case Bitcoin at 5k$ would be equivalent to XRP at 1$. That would probably be a more fair comparison.

 

 

Share this post


Link to post
Share on other sites
Sign in to follow this  

×
×
  • Create New...