Researcher Decodes Link Between XRP Price And Ripple’s Buybacks
January 03 2024 - 4:00AM
NEWSBTC
Ever since, the relationship between Ripple’s XRP buybacks and its
impact on price has been a subject of intense discussion. Crypto
Mark, an active community member on X, raised a pertinent question
regarding Ripple’s strategy of purchasing more of the
cryptocurrency. “Shouldn’t Ripple be trying to distribute XRP and
not buying more though? Would like to see them own less XRP, not
more,” Crypto Mark posted. The Influence Of XRP Buybacks By Ripple
On The Price This inquiry was addressed by Mr. Huber, a renowned
member of the community, who provided a detailed explanation of the
dynamics at play. Huber emphasized the strategic rationale behind
Ripple’s buybacks. “That’s just a question of your knowledge.
Ripple makes it transparent. That’s why we know. And you want
Ripple to buy back XRP. You don’t want them to just sell it.
Believe me. If XRP actually has a use for Ripple then you want them
to buy on open markets for liquidity reasons,” he explained. This
statement highlights the necessity and benefits of Ripple’s buyback
strategy, suggesting that it is beneficial for maintaining market
liquidity. Related Reading: Crypto Analyst Predicts XRP Price
Breakout To $22.39, Here’s When In his analysis of the market, Mr.
Huber pointed out key patterns: “Facts; 1. XRP has sudden
inexplicable very fast price spikes between 30 and 100% which are
then lost over several months. 2. These price spikes almost
invariably coincide with buybacks of Ripple on open markets. They
take place approximately once a quarter. 80% reliability. 3. If you
look at these buybacks, you realize that when Ripple buys 100
million dollars of net purchases within 1-2 days, they trigger a
price spike of around 50%.” Recent data from Ripple’s API revealed
a notable decrease in the company’s buyback activity. The
researcher noted that the API was updated just days ago with the
newest data. Ripple’s sales now account for 167,758,585 XRP, for an
average of $0.62, which results in a total of $104,010,323 from
December 4 to 29. “This is twice the usual sales volume of the last
6 months. I suspect that Ripple wants to push this cut down again
with the next buyback,” reported Mr. Huber. Related Reading: XRP
Price Poised To Hit $20,000: Chad Steingraber Theory Outlines How
Addressing a user’s question about the scale of investment needed
for a substantial increase in the cryptocurrency’s price, Mr. Huber
stated, “$100 million dollars trigger a price swing of around
30-50%. So for 2,000% you would have to expect at least 4-6 billion
dollars in net purchases.” This response provides a clear
indication of the financial magnitude required for substantial
market movements. Impact Of Ripple’s Sale And Distributions
Furthermore, Mr. Huber compared Ripple’s sales and distribution
strategy with other cryptocurrencies. He wrote, “Ripples Sales and
Distribution of XRP of the past 10 years. 6.48% Inflation for 2023.
In comparison with SOL and ETH, it becomes clear that the price
action is due much more to a lack of demand than to Ripple sales.”
He added, “ETH – Reducing supply and proof of stake, but hardly any
price action since the Merge. […] The (XRP/XRPUSD)/(BTC/BTCUSD)
chart shows that over the last 9 years, the supply of XRP has only
increased by 22.73% more than the supply of Bitcoin.” At press
time, XRP traded at $0.63135. Featured image from Kraken Blog,
chart from TradingView.com
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