XRP Market Capitalization is Possibly Overestimated By Billions of USD

According to reports, the market capitalization of the XRP digital token the crypto for the Ripple network could be overvalued by as high as $6 billion. This new estimate is based on a recent market analysis by the cryptocurrency analytics company Messari.

XRP (XRP) Price Today – XRP / USD

#NamePrice24H %
3
ripple
XRP(XRP)
$0.221
2.64%

Messari Researched the Health and Legitimacy of XRP’s Market Cap Ahead of Q4 Last Year

Just before Ripple’s quarter four report for last year, Messari initiated a research on the “health and legitimacy” of the XRP digital token market cap based on data from crypto exchanges and third-party digital asset data services. As per the report from Messari’s research, XRP’s liquid circulating supply could actually be overvalued or overestimated by up to 48% which puts XRP’s actual market capitalization at $6.9 billion instead of what was initially reported by CoinMarketCap that sees XRP’s market value at $13 billion.

Regarding the data analytics report, Messari had this to say:

“In addition to the $59 billion XRP that is held on Ripple’s balance sheet, there could actually be significant, persistent sell pressure in the XRP token market depending on the structure and length of the selling restrictions placed on the Ripple market and Ripple’s co-founders. All of which seem to have negotiated sales rate limits based on the exchange trading volume of the XRP token.”

Messari: Circulating Estimates for XRP Probably Includes Illiquid Positions

Based on the research on the health and legitimacy of XRP’s market cap, Messari notes that the currently circulating estimates provided by CoinMarketCap could actually include illiquid positions like the 5.9 billion XRP tokens reported pledged to RippleWorks’ non-profit foundation by Ripple’s co-founder Chris Larsen. This may also include an additional 2.5 billion XRP tokens held by the RippleWorks, which are, however, reportedly under selling restrictions.

Additionally, Messari believes that the more than 4.1 billion XRP tokens that were reportedly sold by XRP II Ripple’s money services business could also be subject to re-selling restrictions. So following this data, it is safe to say that Messari’s research may have actually unveiled the true market cap of the XRP digital token. However, there’s a wrinkle.

An Exact Estimate Can’t be Provided Without a Disclosure From XRP Parent Company Ripple

Despite the facts on ground, Messari may not have the power to give exact estimates. As per the report, Messari notes that it is not possible to make or provide exact estimates with no disclosure from Ripple. And as of the time this report was published as well as after the period of research done by Messari, the crypto data analytics company had not received a disclosure from Ripple.

According to Messari Ripple did not actually disclose the reference exchange data or methodology data that it used to calculate its XRP token trade volume. However, Ripple’s quarter four report for last year, which was released January 24, 2019, Messari noted a decrease in the average of token sales from an impressive $163 million in quarter three of 2018 to $129 million in quarter four of 2018.

Brian Lubin is a Crypto News Reporter for Smartereum. He's well-known for his reports on the crypto markets.

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