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Will XRP still rise despite being heavily diluted at a high rate? How much has it been diluted since its ATH?


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Circulating supply when XRP is ATH and
https://web.archive.org/web/20180107120132/https://coinmarketcap.com/

Let's compare the current circulating supply.
https://coinmarketcap.com/

XRP
50,950,912,949 - 38,739,144,847 = about 12,212 million XRPs have also been issued since ATH. (From January 7, 2018 to March 8, 2023)

This alone is nearly 100 times the total supply of ETH.
Ultimately, the total XRP supply is expected to reach 100 billion XRP.

12.2 billion XRP released in 5 years.

Ripple averages 12.2 billion XRP in 5 years and 2.4 billion XRP per year.
With the remaining 50 billion XRP, it will be calculated that Ripple will sell it for about 20.8 years.

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IMO most people greatly overestimate the role of dilution and total supply in affecting prices. Speculative prices are driven by a process akin to a Keynesian Beauty Contest. One is not judging who is the prettiest, but who they think others will choose as the prettiest. Of course the others are not judging who is prettiest either, they themselves are judging who they think others will think that others will think is prettiest. A bit like that scene in The Princess Bride. So what is the outcome of this process? Just look at the price. I would say it reflects that most people don't give a shit about supply that much. They are simply trying to outsmart the other speculators in the short run. Of course one could also argue that the market is pricing in a not insignificant chance of it being the next Apple or Amazon as well as as the risk of them going belly up. These likely influence the price far more than supply. In fact, I would say that the role of supply is so small as to likely be irrelevant.

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7 minutes ago, Montoya said:

IMO most people greatly overestimate the role of dilution and total supply in affecting prices.

 <snip>

In fact, I would say that the role of supply is so small as to likely be irrelevant.

100%

 

This was proven when XLM burnt half their supply and the market shrugged.

 

Edited by BillyOckham
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3 hours ago, BillyOckham said:
10 hours ago, shery said:

 

This alone is nearly 100 times the total supply of ETH.
Ultimately, the total XRP supply is expected to reach 100 billion XRP.

12.2 billion XRP released in 5 years.

 

 

Correct me if i am wrong but ETH MAX supply is infinite.

 

looking at ETH supply :

https://ycharts.com/indicators/ethereum_supply

ETH as gone to 98 M to 120 M in 5  years : around 25% of increase.

XRP during the same time from :39 B to 51 B : around 30 % increase.

not that crazy difference.

that said :

Bitcoin 17 M to 19M :  around 10 % increase

https://ycharts.com/indicators/bitcoin_supply

 

 

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I don’t understand why this is even discussed.   XLM did the definitive experiment.  
 

In a freely trading market they announced, and then did,  a burn of approx half their supply.  If naive supply and demand economics applied then their price should have doubled or at the very least jumped a large amount.

It did nothing.  A tiny bump for a few hours then slumped back.

 

So.  Supply is only a factor in perception not reality.  But, as we know, perception counts in a market..  so there is some effect on sentiment but it’s not linear and it’s not significant.

 

Also, nearly every single case of discussion misses the point that the only real basis for comparison between coins is on their minimum indivisible unit. The smallest unit possible.  The Satoshi or the Drop (or some weird one for ETH).

The actual full coin is merely an arbitrary number of those indivisible units. On the XRPL for example all transactions are denominated in Drops not in XRPs.

 

So all that is to say that almost all discussions on supply in crypto are largely nonsense,  and certainly have been proven incorrect by the XLM experiment.

And that’s without going into the nonsense of ‘circulating supply’.  :) 

 

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But this is not entirely irrelevant.
In fact, the price of XRP appears to be greatly affected.

In most cases, cryptocurrencies with an explosive increase in circulating supply tend to fall in price.

The impact of the remaining 50 billion XRP will never be small.

Edited by shery
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There is a tendency for the price of cryptocurrencies to decrease as the circulating supply increases in the cryptocurrency market. This tendency is based on general principles of economics, as it affects the balance of supply and demand.

One common indicator used to analyze price fluctuations in the cryptocurrency market is the market's total circulating supply. This refers to the total amount of a particular cryptocurrency that exists in the market and may have an impact on the currency's price fluctuations.

When cryptocurrency prices increase, new investors and participants enter the market, and demand increases, reducing the relative influence of the total circulating supply. However, when the total circulating supply increases, the balance of supply and demand is disrupted, and prices tend to decrease. For example, if the total circulating supply of a particular cryptocurrency increases and demand for that currency remains unchanged, the price may decrease.It is a common and normal decline in the prices of commodities on the market due to oversupply.

There are many factors that affect price fluctuations in the cryptocurrency market, in addition to the total circulating supply, making it difficult to prove a simple causal relationship. However, historical price fluctuations in the cryptocurrency market suggest that an increase in the total circulating supply tends to lead to a decrease in prices.

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3 hours ago, shery said:

There is a tendency for the price of cryptocurrencies to decrease as the circulating supply increases in the cryptocurrency market. This tendency is based on general principles of economics, as it affects the balance of supply and demand.

One common indicator used to analyze price fluctuations in the cryptocurrency market is the market's total circulating supply. This refers to the total amount of a particular cryptocurrency that exists in the market and may have an impact on the currency's price fluctuations.

When cryptocurrency prices increase, new investors and participants enter the market, and demand increases, reducing the relative influence of the total circulating supply. However, when the total circulating supply increases, the balance of supply and demand is disrupted, and prices tend to decrease. For example, if the total circulating supply of a particular cryptocurrency increases and demand for that currency remains unchanged, the price may decrease.It is a common and normal decline in the prices of commodities on the market due to oversupply.

There are many factors that affect price fluctuations in the cryptocurrency market, in addition to the total circulating supply, making it difficult to prove a simple causal relationship. However, historical price fluctuations in the cryptocurrency market suggest that an increase in the total circulating supply tends to lead to a decrease in prices.

While I applaud your obvious interest in studying the general laws of economics, your take is far too reductive. Yes, supply does play some role, but we are stating (in our opinion) that it is likely far less important than most people think. People tend to get fixated on this metric because it is highly visible, and they neglect other, more relevant variables. If we only consider supply, then 1992 Toyota corollas should be exploding in price as their supply diminishes due to more and more of them being junked. Obviously that is absurd. And even if one does see a correlation between price decline and supply increase it does not mean that it is causal. There is also a strong correlation between per capita consumption of cheese and people dying from being tangled in bedsheets.

 spurious.png.031b6da7bb3bb6cecbbffe754404d961.png

 

As far as your last assertion, this is demonstrably false. In fact, the greatest increase in total value of the crypto market happened at precisely the same time that supply was exploding. A supply-sider might even suggest that this was an example of supply creating its own demand, not the other way around. I tend to think it was simply that other variables affecting price were of so much greater weight, that any downward pressure from supply increases was rendered moot. Like a fart in a hurricane.

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I admit that there are many factors other than supply that influence price movements. However, it cannot be denied that supply affects market prices, and this is based on the economic principle that excess supply generally lowers market prices. Also, I am aware that the price may go up if the total circulation increases but the demand also increases.

But where is the demand for XRP?
ODL is a set of buying and selling of XRP, and it does not appear to be a direct demand that raises the price.Rather, the ODL mechanism transfers funds by maintaining a balance between supply and demand for XRP.

In other words, even if the amount of international remittance using XRP increases, it seems that there will be no buying pressure that directly raises the price in the balance of supply and demand.

 

Edited by shery
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6 hours ago, shery said:

But this is not entirely irrelevant.
In fact, the price of XRP appears to be greatly affected.

In most cases, cryptocurrencies with an explosive increase in circulating supply tend to fall in price.

The impact of the remaining 50 billion XRP will never be small.

XRP HAD a 100B supply when the XRPL Ledger started some years ago, now the supply is smaller. Its a deflationary digital asset.

The market knows about the supply since day one

End of message.

Edited by Gringo
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43 minutes ago, shery said:

 

But where is the demand for XRP?
ODL is a set of buying and selling of XRP, and it does not appear to be a direct demand that raises the price.Rather, the ODL mechanism transfers funds by maintaining a balance between supply and demand for XRP.

In other words, even if the amount of international remittance using XRP increases, it seems that there will be no buying pressure that directly raises the price in the balance of supply and demand.

 

It seems like you are pretending as if speculation doesn't exist, or wont exist in the future, and that price is only derived from the token's fundamentals. Most of the price in crypto, by a long shot, is derived purely upon speculation, not use cases. Perhaps that will change, but that is a big assumption. Why do you assume that in the future, people will only be investing in XRP based upon the worth they see from its inherent functionality or use? In the real world people invest not just on what they think the underlying value should be, but also what they think others will think it will be. And of course, these others are also doing this same calculation. It thus creates a feedback system, and the above mentioned Keynsian Beauty contest. 

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32 minutes ago, Montoya said:

It seems like you are pretending as if speculation doesn't exist, or wont exist in the future, and that price is only derived from the token's fundamentals. Most of the price in crypto, by a long shot, is derived purely upon speculation, not use cases. Perhaps that will change, but that is a big assumption. Why do you assume that in the future, people will only be investing in XRP based upon the worth they see from its inherent functionality or use? In the real world people invest not just on what they think the underlying value should be, but also what they think others will think it will be. And of course, these others are also doing this same calculation. It thus creates a feedback system, and the above mentioned Keynsian Beauty contest. 

But even if we consider that there is speculation, isn't it possible that a currency with a low circulating supply or a currency that does not significantly increase its circulating supply could rise more efficiently in terms of price?

I don't want to talk about speculation, I think we need to create more services to hold XRP in wallets to constantly raise the price of XRP.

Other currencies have many holding mechanisms such as staking, gaming, Dapps, etc.

The demand to hold is the real demand. It will add up and drive the price up constantly.

Ripple has too few such services for the large supply.

 

Edited by shery
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2 hours ago, shery said:

However, it cannot be denied that supply affects market prices

Your reference to "supply" is vague and undefined - does it mean how many Ask orders are on the books of the World's exchanges, or in "circulation," or mined (BTC has been mined non-stop, supply going up? price going up/down?)

Satoshi Nakamoto's bitcoin accounts has 1 million BTC - that's one heck of a supply for one agent.

Imagine if you will one day that 200,000 BTC gets moved from that account to the account of Coinbase, no change in the supply occurs, just where it "sits" changes.

What impact would this action have on the market trading prices ?

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2 hours ago, shery said:

But even if we consider that there is speculation, isn't it possible that a currency with a low circulating supply or a currency that does not significantly increase its circulating supply could rise more efficiently in terms of price?

I don't want to talk about speculation, I think we need to create more services to hold XRP in wallets to constantly raise the price of XRP.

Other currencies have many holding mechanisms such as staking, gaming, Dapps, etc.

The demand to hold is the real demand. It will add up and drive the price up constantly.

Ripple has too few such services for the large supply.

 

create away!

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