In recent days and weeks, there has been much speculation as to whether the XRP price is being manipulated and what forces could be behind it. Now, renowned XRP community member Mr. Huber (@Leerzeit) has made an interesting discovery. According to him, it seems like Ripple has bought back 700 million tokens in an effort to stabilize the XRP price.
Huber, who is recognized for his insights within the XRP community, first shared crucial data indicating Ripple’s recent activity in the XRP market. He presented a chart comparing the XRP price with the total market capitalization of the cryptocurrency market, emphasizing a noticeable pattern.
“Check this out: XRP has lost literally all the extra gains it has made against the general crypto market since the ruling and legal clarity. All of it, really. But somehow it doesn’t want to drop lower than that ratio. Look at the reaction if XRP wants to fall even lower than before the ruling. And it wants to so big time” Huber remarked on X.
In a subsequent post, Huber further elaborated on the underperformance of XRP compared to other cryptocurrencies, expressing his surprise at this trend. “It’s just the fact that xrp is literally one of the 5 worst performing of all of crypto half a year after getting ‘legal clarity’ was not on my mind either. I mean it doesn’t have to outperform it, just not being worse than ever before,” he stated.
The Strategic Purchase By Ripple
Further delving into the matter, Huber found that Ripple was buying back XRP tokens lately, a rare occurrence in the company’s history. “Ripple has been buying back XRP since last week… Ripple bought back around 700 million XRP… In fact, this month is one of the few months ever Ripple was buying back. I wonder why..” he pondered in his posts.
Responding to a user’s query about the rationale behind such a move, Huber clarified, “ODL [On-Demand Liquidity] – Ripple customers selling on open markets making the price drop. Ripple buys back on open markets in order to keep XRP markets stable and liquid.”
He further elaborated on Ripple’s strategy, shedding light on the company’s liquid assets and their role in maintaining market stability. “The escrow is not liquid. They have other liquid wallets which are excluded from circulating supply. So total supply minus circulating supply minus escrow gives you Ripple’s liquid holdings,” he explained.
When questioned about the sustainability of this strategy and its potential impact on the price, Huber responded, “As soon as big buyers buy more than Ripple can provide within their own Pool of liquidity.”
Implications For The XRP Price
This revelation by Mr. Huber has sparked a new wave of discussions in the XRP community. Ripple’s decision to buy back such a significant amount of XRP is seen as an effort to maintain market stability and liquidity. Meanwhile, ODL customers could be a reason for XRP’s lackluster performance.
Prominent figures in the XRP community, such as Edward Farina and WallStreetBulls have argued in recent days that the XRP price has remained stagnant despite significant developments and partnerships. They claim that this underperformance, compared to other cryptocurrencies that surge in value with lesser news, indicates a potential manipulation of the XRP price.
At press time, XRP traded at $0.65359.
Featured image from Shutterstock, chart from TradingView.com
Source: https://bitcoinist.com/ripple-buys-back-700-million-xrp/