These 3 Developments Can Trigger the New Sales Wave in XRP
Ripple’s token XRP may face a new wave of sales. A Puerto Rico-based firm has filed a lawsuit against Ripple and its CEO for alleged security fraud. Meanwhile, disgruntled co-founder Jed McCaleb is reported to continue selling 400,000 XRP each month.
XRP / USD rate holds annual earnings for now
XRP, the cryptocurrency unit of Ripple, the fourth largest blockchain project, faces a difficult task in 2020, when economically difficult processes are experienced.
The challenge is to attract new buyers and retain existing buyers against capital outflow risks. XRP stands in the midst of three market events that are considered to be very pessimistic, and all of them create huge sales pressure in the market.
This big sales pressure begins with the little-known Puerto Rico firm called Bitcoin Manipulation Abatement, LLC, which sued Ripple and its CEO Brad Garlinghouse for $ 1.1 billion of illegal sales. The case comes from another class action of XRP investors, who claim that Ripple was damaged due to the inability to register XRP as a securities to the US regulator.
Another factor affecting XRP’s exposure to massive sales pressure is Jed McCaleb, the displeased founder of Ripple Labs, the San Francisco-based company behind the creation of the Ripple blockchain.
Running a competitive blockchain project, McCaleb released more than 54 million XRP tokens worth $ 11.8 million in April 2020, according to blockchain analysis. The study also stated that McCaleb sold around 400,000 XRP tokens each month.
The last and third problem is Ripple Labs itself. The company paid $ 16.6 million of XRP to its partner MoneyGram to use the RippleNet solution. MoneyGram did not hold these tokens and immediately sold them as a precaution to avoid price volatility.
Ripple Labs has more partners like MoneyGram and each uses Ripple tokens to use payment solutions.
Fall Risk For Xrp
According to the firm’s first quarter financial report, corporate sales in the XRP market have already frightened small investors. According to the report, Ripple was reported to have experienced a 87 percent drop in XRP sales.
In the first quarter of 2020, Ripple sold $ 1.75 million worth of XRP. This figure was worth $ 13.08 million in the last quarter of 2019.
The XRP / USD exchange rate, which banned sales from Corona virus, which affected almost all global assets, on March 12, has managed to record earnings since the New Year.
Data on Messari indicate that Ripple has increased 12.08% since the beginning of the year. However, their gains were less than their competitors recorded. For example, Bitcoin increased by 22 percent, while Chainlink traders made a 105 percent return.
Basically, Ripple may lack interest amongst buyers in the second quarter of 2020. Meanwhile, a drop in Bitcoin price could bring short-term relief to the tokena.