A report by crypto analytics firm Messari claims that XRP’s market capitalization could be overvalued by $ 6 billion.
The market capitalization of distributed ledger technology company Ripple’s XRP token could be overvalued by as much as.6 billion, according to a recent report by crypto analytics firm Messari.
Prior to Ripple’s Q4 2018 report, Messari investigated the” health and legitimacy ” of XRP’s market capitalization using data from cryptocurrency exchanges and third-party cryptocurrency data services.
The report indicates that XRP’s liquid circulation supply could be overestimated by 48 percent, putting the “real” market cap at $ 6.9 billion instead of the actualmente 13 billion currently reported on CoinMarketCap. Messari states that:
“In addition to the 59 billion XRP that remain on Ripple’s balance sheet… there could be significant and persistent pressure on the XRP market depending on the duration and structure of the sales restrictions imposed on Ripple’s market-making Partners, a Ripple-affiliated foundation, and Ripple’s co-founders, all of whom appear to have negotiated rate limits for sales based on Ripple’s trading volume.”
Messari notes that circulating estimates could include illiquid positions such as 5.9 billion XRP that were pledged to the non-profit RippleWorks Foundation by Ripple co-founder Chris Larsen, in addition to 2.5 billion XRP held by RippleWorks, which are allegedly under sale restrictions.
Messari also believes that 4.1 billion XRP that was sold by Ripple’s money services business, XRP II, could be subject to resale restrictions.
The report notes that it is impossible to make exact estimates without a disclosure from Ripple, which it had not received at the time of publication. Messari also claims that Ripple did not disclose the methodology or benchmark exchange data it uses to calculate XRP trading volume.
In Ripple’s Q4 report, which was released in January. 24, the firm noted a decline in token sales from Q 163 million in Q3 2018 to $ 129 million in Q4 2018.