The post Ripple Might Burn Its XRP Holdings – Here’s Why appeared first on Coinpedia Fintech News
In a shocking revelation, former Ripple Labs executive Matt Hamilton has hinted that the company may “burn” its XRP holdings by locking them in escrow, effectively rendering them inaccessible to anyone, including themselves.
This comes as the Ripple Labs and XRP community eagerly awaits the outcome of the legal battle between the payments company and the US Securities and Exchange Commission (SEC).
Top Reason Behind XRP Burn
- Ripple may lock its XRP tokens in escrow: Ripple Labs holds a significant supply of XRP tokens, giving the company a major stake in the token. To balance the market, he hinted that Ripple may eventually lock these tokens in escrow by sending them to a particular address and disabling the master key to this designated wallet. This would render the future escrow funds inaccessible to even Ripple.
- The legal battle with the SEC: The legal battle between Ripple and the US Securities and Exchange Commission (SEC) has caused a lot of imbalance in the potential business alignment for the company, which uses XRP as the primary currency in its On-Demand Liquidity (ODL) service. According to him, if the ruling impacts Ripple’s ability to control the portion of XRP coins, the company may have to source the token in the open market, which could prove to be more costly overall.
- Adoption of another digital currency: Moreover, if Ripple cannot use XRP for its cross-border payment offerings, the company may have to adopt another digital currency entirely. This would negate its core proposition of cheaper and faster transactions that it built its RippleNet platform.
On the other hand, the news has already caused a stir on crypto Twitter, with many wondering what the implications of this move could be for Ripple and the XRP token. As one of the largest holders of XRP, Ripple’s control of a significant supply of the token has been a point of contention for the SEC, which argues that it solidifies the common enterprise argument.
Ripple’s Future Hangs in the Balance!
Ripple’s real-time price is $0.428192 USD. However, industry experts forecast that by May 16th, 2023, the value of XRP will have dropped by -2.75 percent. Clearly, this is not the right time to hold XRP as it is below the 50-day SMA and showing a Sell signal.
In a nutshell, this issue illustrates the difficulties and complexity of the task crypto firms have in navigating regulators, winning over investors, and keeping public support. These legal issues are detrimental to the asset’s long-term health. Keep a close eye on assets’ next move.
“Ripple holds the match that could set ablaze their entire future escrow funds, effectively vanishing them into thin air. It’s a daring move that could redefine the company’s destiny.”
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