The CEO of Ripple Labs, Brad Garlinghouse, was on CNN last Friday with an interview on XRP. The interview lasted 11 minutes and brought up some very important and interesting insights. We consider these to be crucial insights for XRP holders, primarily because in the Twitter community there are some ‘Bitcoin maximalists’ who tend to focus on technology and supply aspects of XRP to paint a negative picture of XRP. As said many times in the past there is no correlation between technology features and the value of a digital asset, because it’s all about adoption and real life use cases. Moreover, when it comes to supply of XRP, why would Ripple be manipulating supply, it’s not in their interest.
We picked out the 5 important take-aways from the interview as quotes from Brad Garlinghouse.
First, by far the most important success criterium for cryptocurrencies is adoption. We said this over and over again, in articles like our Ripple Price Forecast 2019, Ripple Fundamental Analysis: Evidence That XRP Token Will Move To 20 USD and Ripple On Its Path To Become The Largest Cryptocurrency.
This is what Brad Garlinghouse had to say, exactly in line with our thinking:
We see more momentum than ever before in moving XRP liquidity around the world. In a world where there is a lot of uncertainty and FUD around crypto this is a real use case solving a real problem for real customers.
Second, Brad made the point about price following adoption over time.
The long term value of any digital asset will be derived from the utility it is going to deliver. Bitcoin has a utility to be a store of value. But if a Bitcoin transaction takes on average 12 minutes to confirm and the transaction cost is over $1 per transaction that’s not going to be great for a payment solution. So for payments XRP is extremely and uniquely well positioned to solve that payments problem. It’s extremely fast (about 3 seconds per transaction) and it costs around a thousands of a penny to enable that transaction.
Third, about the accusations, especially on Twitter, with regards to dumping of XRP and managing XRP supply by Ripple:
As for Bitcoin there are some whales that own a lot of Bitcoin. In the XRP community Ripple is the largest owner of XRP. The point is that Ripple is the most interested party in the success of the XRP ecosystem. Ripple is very focused on how to solve problems they will Ripple believes. But there are other parties using the XRP ecosystem solving other problems using XRP, think of Coil (micro payments for content). The accusations of dumping are not in the best interest of Ripple because Ripple is primarily interested in a healthy XRP ecosystem. In fact Ripple has taken steps to avoid dumping by locking up supply in escrow so Ripple cannot touch it.
Fourth, on the question whether Ripple can manipulate the price of XRP:
Ripple cannot control the price of XRP any more than the Bitcoin whales can control the price of BTC. XRP trades a billion dollars per day of activity so anybody is in a position to manipulate those prices.
Fifth, if and how Ripple has special conditions about the XRP price when selling XRP to financial institutions:
If you look at Moneygram as an example they take the market price of XRP when they want to move money from US Dollar to Mexican Peso. There is times when working with institutional investors who want to buy large volumes, eg $10M of XRP, we provide lockups to avoid dumping. We would have restrictions on what they could sell and how often, usually based on volume in the market.
All in all it was a very clarifying interview. But for InvestingHaven readers there was absolutely no new info at all. Everything that was said in here is what we wrote a long time ago in our Ripple and XRP FAQ for premium subscribers in our crypto investing research service. It was good to have a confirmation of our thinking though.