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When you believe in a cryptocurrency, you hold it. If cryptocurrency has real value, you are probably using it every day for real transactions that introduce real value into the world. Or perhaps, occasionally, you sell a small portion to cover an urgent expense you have. But if you sell cryptocurrency every day, then it should be a red flag, especially when these sales come from the project’s co-founder and CEO.
Jed McCaleb’s multi-million dollar sales
Jed McCaleb, the creator of Mt. Gox, was part of the team that founded Ripple and for a long time sold over 1 million XRPs per day. In 2011, McCaleb started working on the Ripple project and left the company in 2013. However, through some sort of deal with Ripple, McCaleb continuously receives millions of US dollars worth of XRP from Ripple. On May 1, McCaleb received 55,079,321.39 XRP from Ripple, equivalent to approximately $ 11.55 million.
But this is just the tip of the iceberg, if you scroll through McCalebs’ XRP wallet log, you can see that every day it sells up to 1 million XRP, recently increasing the amount it sells to around 2,090,815.69 XRP per day. , which is around $ 459,979.45 at current XRP prices
If McCaleb truly believed in the project he helped create, he wouldn’t be selling hundreds of thousands of dollars of his coin a day. But given that Ripple’s CEO makes negative statements about Ripple and does the same thing (he sells huge amounts of XRP every quarter), it’s no wonder McCaleb is liquidating so much of XRP.
Is Ripple acting like a scam by pretending to be a public blockchain?
McCaleb isn’t the only one who continually sells XRP. Quarter after quarter, Ripple sells its currency in millions of dollars. Ripple CEO Brad Garlinghouse even admitted that without these quarterly XRP sales, Ripple would not be profitable or positive cash flow.
Here’s a fun quote from Ripple’s CEO:@ garlinghouse clarified “We would not be profitable or positive cash flow [without selling XRP], I think I said that. Now we have it. “
Dumping $ XRP about you is how Ripple stays alive. https://t.co/H2KwsANDVo
– Luke Martin (@VentureCoinist) March 1, 2020
Ripple’s quarterly XRP sales, which were over $ 66 million in the third quarter of 2019, are one of the only revenue-generating events. You’d think Ripple’s partnerships with banks and money issuers like MoneyGram are generating revenue for the company, but that’s not the case. Instead, Ripple actually pays some of its partners for these partnerships.
According to MoneyGram’s Q4 2019 earnings call, Ripple paid MoneyGram $ 11.3 million (in XRP) in the last two quarters of 2019. This is unusual; It is not common for a company to pay its partner significant amounts for the work it is supposed to collaborate on to generate revenue. This also goes without mentioning the initial $ 50 million Ripple invested in MoneyGram to solidify their partnership.
Is it an exit dump?
Ripple’s past and present activity signals that the company is having trouble generating revenue. If it weren’t for its quarterly XRP sales, Ripple wouldn’t be a profitable company. What we’re seeing happening in front of us is an exit dump, Ripple, and previous team members are selling all the XRP they can before XRP becomes useless. That said, you should do as their company does and quit XRP as long as it still has value and don’t be surprised when the company has to close its doors because it’s out of money.
New to Bitcoin? Check out CoinGeek Bitcoin for beginners section, the ultimate resource guide to learn more about Bitcoin, as originally intended by Satoshi Nakamoto, and blockchain.
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