A Look At XRP - Ripple

Ripple

Looking at a cryptocurrency coin one of the most important aspects to consider is current circulation supply and what the total circulation supply will be at some stage in the future.

I have written a few posts on the Steemit platform's SBD coin and the loss of wealth/value due to the increase in circulation supply. This is not always a bad thing. If we look at Tether it is exactly what the coin was designed to do. Circulation supply plays no role in the coin and is always increased or decreased to keep the coin at US$1.

(Source - Coinmarketcap)

Investing in Tether hoping to make a profit from an increase in value would be ludicrous... Then again there are people that invest in coins, like SBD, hoping for the value to go up when in fact it was designed to do something completely different. SBD is more complicated than this simple explanation and there is huge potential for gains in the coin but buying in at the wrong time without knowing what the coin was designed to do might have cost you.

Therefore we have a look at Ripple and the increase in circulation supply from the date data has been made available on coinmarketcap

Coin Price

The coin price and market cap can be seen on coinmarketcap. Data on the coin have been recorded from 2013 at which stage it priced at around US$0.005 varying slightly until mid-2017. From here the price increased to a max of about US$3.80 after which it fell down during to market crash where it is currently trading at US$0.36

If we consider the circulation supply of XRP coins you see a different picture and two main stages can be highlighted.

Stage 1

Stage 1 (encircled in red in the below graph) which is the period between end 2013 to mid 2014 shows a period where the circulation supply of the coin was about 7mil.

On the date of 26 August 2014, an interesting spike in circulation supply occurred. This is very interesting because even though the market cap jumped from approximately 40mil to 141mil (almost a US$100mil jump) there was close to zero change in the price and we all know that the price should increase with an increase in market cap (refer to one of my old articles - Never hold on to SBD).

One explanation could be that the owner of the coin bought US$100mil worth of coins (from himself) and increased the circulation supply at the same time which would not increase the price (this is perhaps the only explanation). With Ripple being a banksters coin it is not unreasonable to assume that they have the fiat currency, US$100mil, to pump into their own coin. Circulation supply increased in 1 day by 20.5bil (yes that is BILLION) coins which is a 254% increase in coins in one day. The best question to ask here is who got the coins? An additional thought to the above is that if they own the coin and can do with it what they want this slide of hand might only be a book entry and no money actually have to move around...

Stage 2

Stage 2 of the graph (blue arrow) is the period from the end of 2014 to present (3 January 2019). During this period there was a more constant increase in circulation supply from about 29bil to more or less 41.5bil. This an increase in circulation supply of about 12.5bil or looking at total supply from 26 August 2014 it was a 43.5% increase over 4.4 years or almost 10% yearly. I have not read up to much on the coin but I would believe that they have somewhere stated that inflation on the coin is 10% (my guess).

Remarks

This is why I like bitcoin. There are 21mil coins that will be released and no one can do with the coin as they please. New coins are released through mining and no single entity can push in a few million or billion coins and increase circulation supply if they like.

I normally like to show what the coins value would have been without the increase of circulation supply but for Ripple I will not include this section of the report because they can do with the coin what they want. I will conclude with an example that might scare you.

Let's take the 100bil Ripple coins pumped into the market on 26 August 2014 for the example. What do you think would happen to the price of Ripple if all these coins were dumped on the market. It is not my prediction that something like this would happen in the future but rather the opposite. The banks know that we are moving away from physical fiat currency to digital currency and they are making sure they own a large portion of the cut in the process. They have allocated these coins to themselves to have their cut of the pie... But heck!!! What do I know. Correct a crypto layman in the comments below.

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