Unveiling the Link Between Ripple’s Buybacks and the Surges in XRP’s Price
Ripple’s recent buyback in the market caused a remarkable 50% increase in the price of XRP, leaving investors intrigued and prompting them to consider the true value of the digital asset. Despite facing regulatory challenges, Ripple still maintains a strong market capitalization of 34.324 billion dollars.
As the third largest digital asset by market capitalization, XRP has captured the attention of both investors and analysts. However, its price behavior has been quite peculiar, characterized by sudden and unexplained spikes followed by prolonged periods of stagnation.
Mr. Huber, a former director and deputy director of the US Securities and Exchange Commission, has shed light on this phenomenon. According to him, XRP’s price fluctuations exhibit a consistent pattern. These fluctuations occur approximately once every quarter and range from 30% to 100%. Following these spikes, XRP’s price remains stagnant for several months.
Research has shown a clear connection between Ripple’s buybacks and these price variations. When Ripple purchases $100 million worth of XRP within a short period of 1-2 days, it causes a price spike of almost 50%. This correlation has significant implications for investors.
Firstly, it emphasizes the importance of monitoring Ripple’s buyback activity. By keeping an eye on these buybacks, investors can gather valuable information to make informed decisions regarding their XRP investments.
Secondly, it raises concerns about the true value of XRP. If Ripple’s buybacks are artificially inflating the price, then investors must carefully consider the authentic value of the digital asset before making any investment choices.
The future of XRP remains uncertain, but Mr. Huber’s analysis suggests that a sustained rally would require a substantial net buy by investors. During the previous bull run in 2017-2018, it took approximately $6 billion worth of net buys to achieve a 20x rally in XRP’s price from its current levels. This is an immense amount of money and would necessitate a significant increase in demand for XRP.
It is yet to be seen if this demand will materialize, but one thing is certain: Ripple’s buybacks will continue to play a crucial role in determining XRP’s price in the short term.