XRP has once again captured the attention of the crypto community, not only due to its recent surge in price but also because of concerns surrounding its centralized token supply. IncomeSharks, a prominent crypto analyst, has highlighted that over 43% of XRP tokens are currently locked and not in circulation, leading to fears of a potential sharp drop back to $0.60 in the near future.
A significant portion of XRP, approximately 43%, is held by Ripple, the company behind the cryptocurrency. Ripple controls 38.9 billion tokens in its escrow accounts, raising concerns among investors about the level of centralization and the potential for manipulation within the market.
IncomeSharks took to Twitter to emphasize the high percentage of XRP tokens that are not circulating, drawing parallels to scenarios where developers hold a substantial portion of the token supply. This level of centralization has contributed to negative perceptions of XRP within the crypto space, with worries about pump-and-dump cycles and price manipulation.
To support his analysis, IncomeSharks shared a chart illustrating XRP’s historical price trends, showcasing patterns of sharp price spikes followed by significant corrections. Past instances, such as the surge to nearly $2 in April 2021 and subsequent 75% drop within two months, highlight the token’s susceptibility to speculative trading and volatility.
Despite XRP’s recent impressive 410% rise to $2.74, the chart suggests a potential correction back to $0.60, following previous patterns of drastic price fluctuations. The prevalence of pump-and-dump allegations surrounding XRP further adds to the skepticism within the crypto community, given Ripple’s substantial control over the token supply.
Overall, the concerns surrounding XRP’s centralized token supply and its history of price volatility continue to fuel distrust among investors and analysts alike. The potential for manipulation and pump-and-dump cycles remains a significant point of contention within the crypto space.