Galaxy Digital’s Michael Novogratz had some interesting things to say about XRP.
CoinDesk quotes the former hedge fund manager saying that XRP, the third-largest cryptocurrency by market cap, “will underperform immensely again this year.”
The reason, Novogratz said, is a potential supply issue caused by Ripple Labs:
“Ripple the company owns 60 billion of the coins, of the XRP,” Novogratz began. “That’s a lot of it.”
The total amount of XRP in circulation is 100 billion tokens. While Ripple was “gifted” 80 billion, its holdings are down to 56 billion, of which 48.9 billion are in escrow and the company cannot touch, according to Breanne Madigan, Ripple’s vice president of global institutional markets.
Nevertheless, Novogratz likened XRP to a situation where a company continuously sells its shares.
“When I’m buying a stock, if I know [someone’s] selling $10 billion-worth of it at some price, it makes me less excited to buy the stock,” he said.
Madigan fired back at Novogratz’s comments, telling CoinDesk that “these statements make clear that Mike doesn’t understand how Ripple manages its stake in XRP and didn’t take time to read what we make publicly available every quarter,” adding that the “increase of circulating supply from Ripple distributions of XRP is actually lower than the increase in circulating supply of BTC, BCH, ETH, etc.”
Interestingly enough, Ripple Labs is Galaxy Digital’s largest holding. Novogratz’s firm invested $23.8 million in the company back in 2018 – including an indirect investment through a special investment vehicle – and now values its stake at $27.6 million.
Nevertheless, Madigan – referencing Novogratz – went on to say that misinformation is one of the biggest problems the crypto industry has to face, and that “there are so many that are willingly – and knowingly – feeding rumors to drive market activity. It is unfortunate that, despite our culture of transparency, influential market participants are ignoring the facts. This holds back the entire crypto industry.”
Photo: RISE