RippleNet is using the native token of Ripple Labs to process cross-border payments. For this remittance, the digital asset company is currently valued at $2-$3 billion at best in the secondary markets. Michael Novogratz, CEO of Galaxy Digital and cryptocurrency whale, noticed that this raises some serious questions about the future of XRP markets and investors in the United States.
Novogratz said that the current XRP holdings of Ripple Labs are reportedly about $70 billion. However, it does not show on the public equity evaluation. It seems that something is missing in-between because Ripple Labs can’t ignore such a centric and massive asset account. Provided that the XRP price settlement is expected, the equity is very low, and if that is not the case, then the token might be overpriced.
Leonidas Hadjiloizou- a senior digital asset analyst and reporter, believes that the notion that XRP is undervalued does not make any sense. Hadjiloizou pointed out that the current XRP holdings at Ripple Labs are saved up in an escrow account. Therefore, the massive XRP holdings are not showing up in the equity or balance sheet of the company.
He further explained that since the $62 billion XRP holdings of Ripple are locked in an escrow that cannot be valued. Furthermore, the XRP token market is presently under attack by SEC lawsuit, which means that it is not possible to correctly evaluate the holdings. In a 2017 public briefing, Ripple said that the company plans to unlock 1 billion XRP tokens for the next 55 consecutive months. The practice has been followed as recently as an ongoing month, as noted by crypto whale reporter @whale_alert.
Why XRP Token Keep Rising?
The last time XRP saw an ATH of $3 was in 2017. Ever since the lawsuit and investigation by SEC, the digital token was delisted aggressively and lost its value drastically. However, this year, the XRP rally on the rise, and thus far, the token has gained a momentum of 160% appreciation. Kelvin Koh, the Managing partner at Spartan Group, thinks that this rally is on account of Bitcoin to altcoin convergent trading.
According to the market analyst index, Santiment, in the aftermath of the SEC lawsuit, the social volume of the altcoin was improved. One technical cause of the XRP rally is because the market short from both positional and sidelined standpoints is observed by cryptocurrency derivatives trader Cantering Clark. Another trader, Kaleo, believes that XRP is on the verge of a three-year downtrend breakout against Bitcoin.