Easy come, easy go?
For XRP, the maxim holds true into a new week. Bulls are no doubt looking wistfully at last week’s action, when the price rose more than 100 percent and headlines held promise over XRP’s adoption into (a bit) more mainstream, everyday financial life.
As of today (Sept. 25), the price has fallen by more than 18 percent, rebounding a bit and trading at about 46 cents. The other two marquee names in the space, bitcoin and Ethereum are off at a respective 2.7 percent and 10.3 percent, respectively.
At $.46 per XRP, we are a long way from the $.69 seen just a few days ago. As reported, Ripple has been making inroads bringing XRP into new use cases, and the company has about 60 billion XRP among its holdings. CNBC had reported per company management interviews last week that xRapid, geared toward speeding up bank transactions in tandem with using the crypto, would be launched within the next several weeks. That would come on top of xCurrent-focused partnerships with companies such as Santander.
Thus, the spike and, perhaps, the retracement. All told, about $9 billion has been wiped off XRP’s market cap in the last few sessions.
“There doesn't appear to be a major catalyst for the downside move, apart from investors taking profits,” said CNBC.
There may be something else in the wings, though. The Wall Street Journal (WSJ) reported that Jed McCaleb, a Ripple co-founder, has been stepping up sales of XRP, and he holds billions of dollars-worth of the token. McCaleb has also co-founded Stellar, which competes with his old firm.
Therein may lie a tale. Forbes reported early this month that in 2014, McCaleb “became disgruntled and departed, ’forking,’ or copying, XRP’s code to start rival venture Stellar.”
The rivalry over international payments is getting a bit heated. Consider the fact that Stellar bought blockchain startup Chain in a cash deal, a transaction that has created Interstellar. Stellar has as its CTO none other than McCaleb.
Now comes the news, in the wake of that deal, that McCaleb has been selling down at least some of his holdings, per an agreement with the firm that was struck three years ago, and he both directly and indirectly holds more than 7 billion XRP (counting, according to the WSJ, what is held with children and through a separate fund). He had been selling below a 75-basis point cap on daily trading as a percentage of volume, but has been stepping up the pace from previous daily sales of between 20,0000 to 40,0000 XRP daily.
“For example, over six days ending Wednesday, Mr. McCaleb sold more than 500,000 XRP a day, or about $150,000,” WSJ reported. Yet, the average daily volume for XRP has not changed much.
Notably, WSJ said McCaleb has to have Ripple’s approval to make changes to, and sell above, the cap. The firm releases the tokens to McCaleb, who in turn sells them.
That leads one to wonder: Is this a case of “buy the rumor” and “sell once the rumor has spiked the price” bad blood or a combination thereof?