Ripple and XRP FAQ

This page lists questions from our members with answers from InvestingHaven’s research team specifically on the topic of Ripple and XRP. That’s because this is a very controversial and loaded topic.


There are some ‘shenanigans’ out there who love to discredit Ripple and XRP. Note that we use the word ‘discredit’ as opposed to ‘challenge’. We strongly believe that challenging things is THE most important thing to do by investors. But after analyzing the arguments of several Ripple opponents we concluded their arguments are weak at best, and destructive to long term portfolios at worst. That’s because they mostly, if not only, criticize ‘crypto internals’ like technology specs and market cap. Our viewpoint starts with ADOPTION which we would cal a ‘crypto external’ factor.

Question: How concerning is the so called Messari report for crypto investors?

Our answer: When talking about the Messari report we refer to this devastating report about XRP from a person called Ryan Selkis and his company called Messari. We’ll refer to it as the ‘Messari report’. This person ‘coincidentally’ is also a former managing director of Coindesk, a data point we will refer back to later on.

In essence, it claims that XRP is overvalued because there is less XRP in circulation than officially announced by Ripple. More specifically, they say “XRP market cap is likely overstated by $6.1 billion based on inflated circulating supply numbers.”

In essence, it is impossible to compare our viewpoint with the one in the Messari report because we apply a totally different thinking framework. In our framework it is ADOPTION that matters for future growth and stimulus of XRP prices; however, the Messari report only talks about ‘crypto internals’ like market cap which is not important for us unless there is fraud at play which we do not believe.

Our detailed answers to the Messari report criticisms and ‘concerns’ are described in the next point, pay special attention to the 4 answers outlined below.

Question: XRP seems to be centralized. What does it mean and is it a concern?

Wat’s the issue? Ripple as a company has some 50% of the cryptocurrency XRP under their own control. This, according to how we understand the issue, is related to the escrow here in this article.

Moreover, the ‘Messari report’ believes that 19.2 billion of the 41 billion XRP is illiquid, because of several reasons.

Some of the concerns we understand from our readers:

  1. XRP is a centralized cryptocurrency.
  2. Consequently, Ripple can decide what happens with XRP.
  3. Consequently, Ripple can manipulate the price.
  4. Consequently, Ripple can freeze the XRP anyone of us owns.

Moreover, is the thesis, Ripple will use XRP for its own purpose (invisible agenda). Maybe they have hidden relationships with banks and institutions so they will serve their objectives.

Finally, specifically out of the ‘Messari report’ it would be that the price of XRP should be lower because of a lower market cap in case the illiquid XRP would be excluded.

Our answer #1: What exactly is the risk of not fully decentralized XRP?

Before looking into the ‘Messari report’ let’s focus on the centralized aspect of XRP.

What exactly is the impact that it’s not as decentralized as ethereum or bitcoin? Can we identify the exact risk or impact?

Theoretically, it may be correct that Ripple will be able to decide on XRP related ‘changes’ that may have a negative impact to XRP holders. Whether they are able to freeze the XRP that many of us hold, we are not too sure.

For the sake of argument let’s assume it is the case, and assume for a minute Ripple has more power than all of us believe.

So here is then question: why would they abuse this, and freeze all XRP in circulation?

Ripple is a company that grows like crazy, they are signing up one major bank / financial institution after another. They are working directly with the SEC in the U.S. They are part of the Steering Committee of the U.S. Fed’s new payment infrastructure as explained by our team in this article. They have a growing number of contracts with banks and financial services in which they commit on delivering services with XRP as the means to transfer (high) amounts of money cross continental.

And out of the blue they would freeze all XRP or manipulate prices actively?

In all honesty, this is Taki Tsaklanos talking in his personal name: “I don’t get it, I don’t see it, really.”

Why would a company that is gaining credits all over the world, the fastest growing startup with a cryptocurrency, that is working for 7 years on a concept that was initiated 15 years ago (pls verify the history of Ripple on Wikipedia) do something like this?

You cannot compare this with shady illegitimate cases we have seen in the crypto space like Mt. Gox exchange in China which indeed did things that were illegitimate. It’s a totally different case.

Also, by far the most important thing to look at according to us, is growth and adoption. If Ripple has solid reasons to have some of their XRP in escrow then that’s a management decision. It should not be confused with blockchain principles and Satoshi principles, that’s the technology part, it is ok to split both is there is a good reason.

The point we are trying to make is that we need to broaden our view, and look further than technological ideology. Considering the business aspects we mentioned above is one.

Moreover, from a shareholder perspective, Google (Alphabet) took a participation in Ripple several years ago.

And from a technical perspective, with the technical setup of XRP as we understand it the XRP Ledger has about 150 servers that operate as validators. Ripple runs just 9 validators out of the 150. If Ripple was really about controling the XRP in the spirit of conspiracy they would not give away control on their Ledger in such a big way?

What we are saying is to avoid taking a narrow view. There are multiple data points we have to investigate.

Our answer #2: What about the ‘real’ supply of XRP?

The point we made above is that we prefer to look at the big picture as a function of our investing thesis. Our investing thesis is based on adoption and growth based on a startup (essentially, every cryptocurrency is a startup with a cryptocurrency) solving real life problems.

By looking at things from this perspective we create a different viewpoint, one that, according to us, really matters for investors. The level of centralization is of secondary importance, it should not be the key point of the discussion.

Now back to the fundamental point of the ‘Messari report’: there is a certain illiquid part in the supply.

What we do know is that XRP has pre-mined supply. When the XRP Ledger was created in July 2012 all the 100 billion XRP’s were created in that Genesis period. When Ripple built the initial Ledger the idea was to get rid of Proof of Work which is what mining is all about. It is not an adversarial system like the Bitcoin Ledger.

So if the ‘Messari report’ states that 19.2 billion XRPs are illiquid how important is it? In the end there is finite supply, a figure that is known, of which some 50% in escrow and the rest living on the XRP Ledger.

In the end, we cannot verify that figure of 19.2 billion XRPs. But our point is this: you take the price of an XRP and divide it by the total supply in circulation OR you take the total supply minus the supply in escrow is besides the point. It is the value that this crypto creates over time, for sure if it’s pre-mined.

Our investing thesis says that:

  • Ripple is growing strongly. It uses XRP in their system, maybe not for all transactions but it actively uses it.
  • This stimulates usage of XRP, which is liquidity.
  • Because of all this there is significant credibility, not only by clients but also by institutional investors and retail investors.
  • Both liquidity and credibility will eventually translate in a higher XRP price.

Let’s continue with our rationale with the following point, related to the thinking outlined above.

Our answer #3: Are you aware of the risks in the financial world you live in?

A much, much bigger risk, and very similar in nature, is that your bank and my bank and everyone’s bank has the ability to freeze all of (y)our savings accounts and checking accounts and so on. Why would a bank do this?

Similarly, and this list is not meant to be exhaustive, we all face risks in the financial sector like the ones listed here:

  • A broker can freeze all your shares. Do you really think you own stocks of companies if you buy them with any broker?
  • Your precious metals at any bank or bullion bank can be frozen.
  • Do you really think the amount that is shown next to your savings account is there waiting for you at the bank?
  • Lehman Brothers was a respected company, right? Eventually, it destroyed lives of so many people in 2009 because of its malpractices!
  • And so on, and so forth.

It becomes even worse. One of our research team members lives in Canada. Some of her crypto holdings were on the QuadrigaCX exchange. What happened last month? The owner of the exchange passed away, he was the only one holding the keys of the cold wallet(s) of the fund, and now $190M in cryptocurrencies in gone! This is the news from yesterday.

Oh, what’s the real risk in these examples?

The sad truth is that everything we do is based on trust, regardless of terms & conditions and their small prints that companies use in their relationship with their clients. It is all about the intentions of a company, how they manage their people and products, especially in the financial world.

So the crux of the story is that this is a judgement call that everyone of us individually, in our role as investors, has to make. Do you trust these guys at Ripple after you have spent many hours reviewing what they do, how they do things, how they think and how they manage their company and cryptocurrency?

  • If yes, you should own some XRP.
  • If no, why don’t you sell some or all of your XRP holdings?

It’s really as simple as this. And twitter storms are not going to help, discrediting Ripple is not going to help. The only thing that is going to happen is that an already immature industry will take longer to mature.

We cannot and will not make this judgement call for you. We are here to bring facts to your attention, and to define a solid investment thesis based on fundamental and chart analysis. The buy and sell decisions based on these data points and investment thesis is yours.

Our answer #4: Who is making this point?

Some basic research about this person Ryan Selkis that manages the company that published the ‘Messari report’ paints a clear picture of the person. Again, no criticism, just facts and observations.

So here are a couple of points to consider:

  • There is no professional behavior by this person as evidenced by this tweet storm. He does not offer any evidence whatsoever for his criticism.
  • His vision in 2016 on the crypto market is way too much focused on Bitcoin, and it probably still is. Seems like he is just not open for crypto applications outside of Bitcoin.
  • He was a director at DCG group, a crypto investing company, which acquired Coindesk in 2016. You may argue there is nothing wrong with it. I can tell you that based on personal conversations with people that are deep in the blockchain industry doing GREAT innovation it is clear that Coindesk does not provide coverage unless you pay them. This is the way to stimulate the blockchain industry? Or is it control of information?
  • Coindesk was selling an Ethereum book for $500? It is clear, two years later, what a disaster Ethereum really is in terms of adoption? If not, please check out stats on Ethereum based applications and compare them with the other platforms like EOS or Tron.

The point we are trying to make is that, if there is one red line in this person’s history, it’s that he is very commercial in nature and focused on own benefits. The grand vision and focus on adoption lacks, really.

So, we will not be able to have a conversation in comparing the view in the ‘Messari report’ with our view, because we apply a totally different thinking framework.

Question: Ripple’s XRP has so much good news. Yet, prices go down. Are you really convinced that your 20 USD price forecast is reasonable? This question was answered in Jan 2019.

Our answer: XRP is amazing. Its growth will go really, really hard. Here are a couple of points to consider:

  • They are about to revolutionize a giant market. This is a process that takes years, Ripple in its current form exists less than 7y. How does anyone reasonably expect a world changing disruption, once in a generation, to accomplish in such a short time period.
  • Patience is required.
  • I feel really strong about the 20 USD forecast.
  • Obviously, and that’s what I said in one of the last premium alerts, with the current course of things, the 2019 timeframe will be delayed to 2020.
  • With the Nov 2018 breakdown the repair time will take some 9 additional months until proven otherwise.
  • I am pretty sure that your XRP holdings will make up for all other non-quality cryptos you may have bought in the past.
  • Don’t get trapped by the market and your virtual loss. Many smart investors are waiting to buy low.
  • Things can only get better, even if we go lower from here in the next few weeks or months.

Question: So what are YOU doing with your XRP, as prices go down but your forecast is bullish, can you disclose?

Our answer: Full disclosure: “This is Taki Tsaklanos, talking in personal name now and not for the rest of the research team. I did _NOT_ sell any of my XRP in the last 12 months after calling for an important op on Dec 31st 2017, and am only looking to buy more right below current price levels. Just waiting a couple of days to define the exact buy entry point.”

Question: Do you expect any other cryptocurrency to go up 10-fold or 100-fold in the near term, knowing that XRP will likely not rise very high (yet) in the next few months?

Our answer: NO, absolutely not. Don’t forget that this is (1) a cyclical market and (2) one asset class. In other words, (1) the market moves with ups and downs spread over a couple of years, (2) all cryptos go up and all down simultaneously because it’s one asset class.

Question: What in your opinion is the best case price by the year end 2019. I keep reading about Ripple being passed by other coins. It’s not decentralized or scalable. People like Marius Kramer on Quora are very negative on Ripple. It’s all just confusing to a novice like me. You are bullish and positive, some other guys are negative and bearish.

Our answer: Great point! Indeed confusing if you are a novice.

The technical answers to most of these questions are here in an article that we published in the public domain, because it was based on publicly available information: 10 Facts about Ripple’s XRP for investors. We analyzed several documents and listened to in-depth interviews with executives of Ripple.

What you have to know about Ripple is that there are many proponents, but also a small group of opponents which tend to be very vocal. Very strange, but also very striking. We have analyzed the counterarguments of the opponents, and don’t see lots of value in it when looking at things over time (with the timing dimension in mind). Some arguments may be somehow relevant at present day, but not taking into account the evolution that we see in Ripple’s value proposition and tech stack. Don’t forget these are relatively new technologies, they need time to evolve and comply with legal, banking systems, blockchain principles, and so on and so forth.

In sum, we don’t attach too much value as the arguments of opponents are pretty weak at best, and irrelevant over time.

Once you start focusing on what Ripple is establishing and accomplishing you can only conclude that this is truly amazing. Not any other cryptocurrency comes close to their accomplishments. That’s OUR focus to assess cryptos: value creation in the real world, and evolution in terms of progress over time.

Question: Blockchain is a great technology. Why are more people not using it? What does it mean for crypto prices?

Our answer: Because it’s too new and every technology starts slow before accelerating exponentially. One thing everyone has underestimated is the pace of adoption. The really juicy use cases take longer to find, because you need an ecosystem in which blockchain can really deliver added value. There is only a handful of companies that already established an ecosystem, one of them being … Ripple of course!

We refer to our Decentralized 2018 document which was written exclusivey for our premium members! Everything in there is as actual as you can imagine. However, this is the fundamental part, and price is not necessarily adjusting to fundamentals in a rational way. There is irrational exuberance, which is what we have seen in 2017. There was an overreaction of prices to the upside, and now there is an overreaction to the downside, which goes hand in hand.

What we continuously sense is stress among members because of falling prices. Our answer to this is that you should focus on the bigger picture. Prices will fall until they stop falling. The market does not care about you: if you like an end of the decline at $6k, $3k or $1k is irrelevant. The only one you hurt with your stress is yourself. This is the sad truth of investing, for sure when you did buy too high, and whoever is going to paint a rosy picture is fooling with you.

Which leaves us with one critically important question: will prices ever go up again or not?

Because if anyone tells you that in 2 or 3 years from now, regardless of the exact timing, XRP would trade at $20, how would you react?

So we are left with this fundamental question to control ourselves, and justify that we believe taking a position at or below current levels is a good thing, right?

We firmly believe that everything we wrote on the next crypto bull market that is coming, especially to premium members in the last 4 months, is as relevant and actual as ever before. This is not the end, but the beginning of crypto and blockchain. Blockchain is not a fantasy technology, but it is for real, we just have not figured out yet how exactly to make it work other than some specific use cases like the ones of Ripple and tZERO.

Remember these two things:

  • When it comes to prices: It always feels extremely bad at the end of a bear market. But if you survived up until now, it is a small effort to continue to hold, for sure if you have quality crypto like XRP.
  • When it comes to fundamentals in technology: The blockchain industry is a great application of Roy Amara’s law: He said that we tend to overestimate the impact of a new technology in the short run, but we underestimate it in the long run.

Question: How concerning is the competition like Swift and JP Morgan coin?

Our answer: before jumping into a simple comparison between JPM coin and Ripple / XRP we have to take one step back and look at the big picture. It is the only way to compare JPM coin with XRP. If you don’t do it you will never understand the real value and potential of Ripple / XRP.

Note that this is THE most important update on Ripple and XRP you will ever read, not only from us but we challenge each and every one of you to find a sharper vision on the world, on any blog, on any site. You will not find any. No worries, we say this in all humbleness.

Many crypto investors are way too easily influenced by non-sense that appears on the internet. It’s bad practice to simply believe what some are saying without challenging their thoughts. It will ultimately hurt your portfolio. Moreover, it is not good practice to invest in something that you don’t understand or believe in.

Below we outline the reaons why we are not concerned about JP Morgan coin and Swift, at least not in Feb 2019 given how Ripple has continuously shown great progress on their plans (this of course is subject to change over time although we cannot believe they will deviate from their brilliant execution).

Question: Ripple and XRP vs. their competitors like JPM coin or Swift

Our answer: Ripple is not a payment service provider like SWIFT, it is not a bank. You should never compare both in this way, it will not make any sense and you will end up finding plenty of reasons why Ripple will not be able to win the competition.

The one and only way to look at Ripple is by looking at is as a ‘blockchain service provider’ which enables ‘innovation in the internet of value’. Now THAT’s a TOTALLY DIFFERENT way to frame a comparison between Ripple and any other company.

Ripple enables transfer of value, which includes but is not limited to, cross border payments. It just happens that cross border payments is the most obvious and simple service to disrupt.

Ripple transfers any value to any other value, from any point to any other point, in a seamless and ultra cheap way. There is a tremendous level of potential that is unlocked in this way:

  • Transferring a monetary value from a bank account to a mobile payment app, in any currency.
  • Transferring a monetary value between banks that are not working together with each other, in any currency.
  • Transferring a monetary value between alternative payment services that are in no way linked to each other.
  • Transferring micropayments at scale between people.
  • Transferring micropayments at scale between payment services that have no link whatsoever.
  • Transferring a value that even is not monetary in nature, think of physical assets.
  • Transferring value that is non-monetary in nature into a payment.

And so on, and so forth.

Ripple’s CEO said in its debate with Swift’s CEO in Paris at the ‘Let’s send the money!’ event (the largest fintech in the world especially by the volume of attendance of traditional banking and financial services companies) one thing that not many understood. He said: Ripple’s vision is based on the internet of value.

Watch the Ripple/Swift debate here >> 

You might want to skip this video. That’s fine, but don’t be surprised that are you shocked and concerned next time you see a tweet in your twitter feed or reads an article on financial media or crypto media that discredits Ripple. If you don’t spend a minimum of time understanding the deeper and long term vision of Ripple you will simply never get it. This video is absolutely worth spending time on as opposed to most social media and financial media things you read!

The list of new services that simply do not exist on this world today which we outlined above is exactly what Ripple’s CEO meant with ‘internet of value’. It goes way beyond the classic payment, it is something totally different in nature. Ripple is the only company enabling this.

The only and best way to understand Ripple is by comparing it with Amazon’s early days

Now that’s a statement, right? Comparing Ripple with the largest tech company in the world?

Are we nuts? No we are not. On the contrary. Nobody ever before used this comparison, but bare with us here and you will find our observations astonishing!

One of our loyal readers shared this interview with Jeff Bezos, Amazon’s boss, from 1994. We strongly recommend listening to it and trying to see the comparison with Ripple we are talking about. We have picked out the most important insights from Amazon’s early days:

  • Video at 7m15s: Amazon was growing at a rate of 2M new customers per month in 1998. It was growing much faster than other internet companies.
  • Video at 8m20s: Bezos says “you can’t touch nor smell the books we are selling, it’s a different customer experience.
  • Video at 8m50s: The commentator says: “After buying books the computer greeted me by name. The computer also remembered my past orders, and after comparing me with other customers who bought the same books it calculated which new books I might be interested to buy. Using the same kind of wizardry Amazon also had some idea about what kind of music I might like to buy.
  • Video at 9m55s: Amazon is collecting 350 floppy disks every day with customer data. What do they do with this? Bezos says: “That’s the type of data that allows us to predict what books, music or videos that you would like, that you have not discovered yet.”

Now please read this at a minimum 3 times. Try to imagine: this was 1994. Amazon was working on totally new customer experiences, on predictive analysis based on customer click and purchase behavior, on personalization and product recommendations.

Today, 25 years later, the whole world is trying to improve customer experiences + do personalization based on product recommendations. As per Trendwatching the amount that companies will spend in 2019 1.7 trillion USD on this (source) which is all digital transformation related. That’s 2% of the global GDP!

But Amazon was working on this already in 1994. They pioneered all this. What a visionary company, amazing. But who really understood their vision back then?

What if an investor back then would look at Amazon and say that it’s a book seller without stores? They would have missed an amazing investing opportunity!

Now, 25y later, we obviously understand that Amazon should not be compared with a traditional book seller. Amazon un-bundled the purchasing experience of books, videos, music, and so many other things, and re-bundled it in a totally different way based on personalization and improved customer experiences, essentially all great benefits that the internet as a technology offered! They fully leveraged all technology benefits on the internet, in a way nobody else had done before!

Small detail: Marc Andreessen, one of the most successful investors on the internet, said that the most successful internet companies did one thing very well, in a visionary fashion: un-bundle old services and re-bundle them by leveraging possibilities of the internet. Read the Harvard Business Review article here.

Do you start seeing any similarity with Ripple, and XRP?

  • If you compare Ripple with Swift or any other banking service, you are missing the point.
  • If you don’t understand the grand vision of the internet of value, you are missing the point.
  • If you don’t understand which benefits the blockchain brings, you are missing the point.
  • If you don’t see how Ripple is leveraging digital assets to do things that nobody else has done before, you are missing the point.
  • If you don’t realize how much ‘problems they solve’ with technology, or vice versa to which extent they leverage the technological possiblities, you are missing the point.
  • If you don’t see how Ripple has been growing during the recent crypto winter, as opposed to 99% of all other crypto startups, you are missing the point.

So next time you read a Messari report that only talks about market cap and does not mention any of the points we make above, think twice before you get concerned.

Next time you read a tweet or blog post that only talks about XRP’s price or its volatility or its correction without mentioning any of the points we make above, think twice before you get concerned.

Yout got our point, right?

Oh, and here is ‘small detail’, even in 1999 right before the dotcom bubble burst there were plenty of reasons to be concerned about Amazon’s high price. See this video to learn about the type of concerns market analysts were raising on financial media. What would have happened if you listened to all these concerns of these gurus and top analysts? Indeed, you would have sold Amazon, only to find yourself missing 100-fold returns 20 years later!

Here is a small secret, dear readers: there is ALWAYS plenty of reasons to be concerned, even with the next Amazon, which may be what Ripple will become one day. In a couple of minutes you will have found dozens of reasons, by searching on financial media + social media + crypto media why you MUST be concerned about Ripple.

This is the rule of thumb that you may use: if at a minimum the one time the writer uses the word ADOPTION then there is reason to be concerned. If not, it’s worthless at best, and destructive for your portfolio at worst. Go back to this article we wrote Ripple Price Forecast For 2019 and study the chart in the “Why our Ripple price forecast for 2019 (XRP) is ultra-bullish” section. You see that Ripple is focused on creating network effects now. That’s the smartest thing they can do, and it’s based on ADOPTION.

Again, Amazon was the fastest growing tech company in 1998, think back to that one data point and fact!

So what does all this mean for the JPM coin?

It’s a non-event. We even forgot about it already.

Let’s do the comparison:

  • JP Morgan is in the banking services. Ripple is an innovator, unlocking net new services and experiences on the blockchain,  in the context of the internet of value, leveraging the XRP digital asset.
  • JP Morgan has a stablecoin to transfer cross border payments. Ripple has a cryptocurrency to transfer value.
  • JP Morgan makes only use of its stablecoin in a closed environment. Ripple is all about open networks, interconnections of and between blockchains, connecting points that were impossible to connect in the past (think of the list of services we outlined above).
  • Ripple goes for the ’10 times more value factor’ with blockchain, see the details about it here.
  • JP Morgan has a similar setup like Swift: improving a technology of the previous century by speeding up payments and making them more transparant. Ripple re-defines and disrupts the whole framework and notion of payment, and creates a contemporary 21st century of it. Ripple enables “any to any, bi-directional”.

An easy way to illustrate the JPM coin with XRP? In 1994 you would say ‘djeezes Barnes & Noble is about to launch an e-commerce service selling books, they will destroy Amazon because Amazon is such a small and new player in the market’. Got it? It’s not about selling books online, it’s about un-bundling and re-bundling the experience around purchasing goods, redefining the framework and paradigm.

In no way are we concerned about the JPM coin, on the contrary. It will only help highlight the unimaginable potential that Ripple will unlock, in comparing it with the limited options that JPM coin but also similarly Swift offer. This will only become clear over time, unless you truly understand and grasp Ripple’s vision at present day.

Taki Tsaklanos

Taki Tsaklanos

Taki has +15 years of experience in global markets. HIs methodology is unique and effective, yet easy to understand; it is based on chart analysis combined with intermarket / fundamental / sentiment analysis. His work appeared on major financial outlets like FinancialSense, MarketWatch, ... Email: Twitter:

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