- Ripple CTO David Schwartz talked about burning XRP supply to boost prices.
- Schwartz also said that he would not engage in burning or gifting XRP to initiate price surges.
- Ripple has decided to reduce its XRP holdings.
Ripple’s CTO, David Schwartz, addressed critics who believe the company suppresses the price of XRP, the seventh-largest cryptocurrency by market cap, by flooding the market with tokens.
Schwartz took to X (formerly Twitter) to explain that burning XRP tokens or giving them away wouldn’t magically boost the price. He stated that the burning of Stellar (XLM), the thirtieth-largest cryptocurrency by valuation, had no impact on the price of the altcoin.
He further highlighted an X post from earlier this year where he explained why gifting XRP to the crypto community is not the right way to go as well, confirming that the strategy worked out initially for Ripple but then the altcoin became liquid. Schwartz added:
Giving XRP away is functionally the same as selling it, but worse because people will spend $.95 to game a $1 giveaway and most of the funds wind up in the hands of the fraudsters.
At the end of the day, Ripple is left with two options: reduce its XRP holdings or hold them. The company opted for the former, announcing a plan to release $1 billion worth of XRP per month for 55 months.
A Reddit user, activeruins, argued that Ripple’s token sales have a minimal effect on XRP’s price. He explained that Ripple is only allowed to sell 1% of monthly volume every month and as a result, the prices remain stable. The Reddit user added that Ripple has rarely sold XRP from that 1% in the open market.
According to activeruins, the burning of supply does not result in price increase of a digital asset including Bitcoin (BTC). The Reddit user said that Bitcoin and XRP are the only safe assets in the market.
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