A prominent online crypto analyst has issued a stark warning to holders of XRP, expressing skepticism about the token’s value in relation to the thriving business of Ripple Labs. In a recent video, the analyst, known as Fire Hustle, stated that while Ripple’s business fundamentals and market valuation have made significant gains, the price of XRP has not mirrored this success and may remain stagnant due to its underlying structural issues.
Fire Hustle pointed out that Ripple’s current market valuation stands at approximately $50 billion, bolstered by a $750 million buyback of its own shares. However, this substantial financial maneuver benefits Ripple’s equity investors rather than those holding XRP. “You holding XRP? Well, you get nothing from that buyback,” the analyst declared, highlighting a disconnection between Ripple’s business progress and the value provided to XRP holders.
The analyst further explained that Ripple’s technology is gaining traction in the market, with notable institutions like Deutsche Bank and Mastercard utilizing Ripple’s framework for transaction processing. With over $100 billion in total transactions facilitated through Ripple’s infrastructure, the company is performing well across various operational metrics. Yet despite these accomplishments, XRP’s market performance has sharply diverged, with its price dropping from a high of about $3.65 to below $2, reflecting a significant downturn over the year.
Central to the analyst’s critique is the notion that banks and institutions using Ripple’s payment and settlement infrastructure can do so without holding XRP. Instead, they can opt for RLUSD, a stablecoin linked to Ripple, which offers price stability—something XRP lacks. Fire Hustle remarked that for bank treasurers, the volatility of XRP, characterized by double-digit price swings, makes it less appealing compared to stablecoins. This preference for stability among institutional users can hinder XRP’s adoption.
The report suggests that around 80% of RLUSD transactions occur on the Ethereum network, indicating that transaction fees and benefits primarily accrue to Ethereum rather than XRP. “Ripple thrives. XRP bleeds,” Fire Hustle concluded, urging XRP investors to recognize the gap between Ripple’s business achievements and the token’s current predicament.
For crypto investors, the key takeaway is the importance of understanding the incentive structures at play. As major enterprises leverage Ripple’s technology while favoring stablecoins and Ethereum for transactions, the long-term viability of XRP as an investment may depend on whether this significant disconnect can be bridged. Otherwise, XRP risks remaining sidelined in a financial system that it has helped to enhance.
