Ripple CEO and co-founder do not believe in XRP

Ripple CEO and co-founder do not believe in XRP

When you believe in a cryptocurrency, you hold it. If the cryptocurrency has any real value, then you are probably using it every day for real transactions that introduce real value into the world. Or maybe, every once in a while, you sell off a small portion to cover a pressing expense that you have. But if you are selling the crypto every day, then that should be a red flag–especially when these sales come from the co-founder and CEO of the project.

Jed McCaleb’s multi-million sales

Jed McCaleb, the creator of Mt. Gox, was on the team that founded Ripple—and for a very long time, he has been selling upwards of 1 million XRP per day. In 2011, McCaleb started working on the Ripple project, and by 2013, he had left the company. However, through some sort of agreement with Ripple, McCaleb continuously receives amounts of XRP equal to millions of U.S. dollar from Ripple. On May 1, McCaleb received 55,079,321.39 XRP from Ripple, equal to roughly $11.55 million.

But that’s just the tip of the iceberg, if you scroll through McCalebs XRP wallet ledger, you can see that every day he sells upwards of 1 million XRP, recently increasing the amount that he sells to about 2,090,815.69 XRP per day, which is about $459,979.45 at current XRP prices

If McCaleb truly believed in the project he helped create, then he would not be selling hundreds of thousands of dollars of its coin per day. But given that Ripple’s CEO makes negative statements about Ripple and does the same thing (sells massive amounts of XRP each quarter), it’s no wonder that McCaleb is liquidating so much XRP. 

Is Ripple acting like a scam by pretending to be a public blockchain?

McCaleb is not the only one who continually sells XRP. Quarter after quarter, Ripple sells their own coin in amounts in the millions of dollars. Ripple’s CEO Brad Garlinghouse even admitted that without these quarterly XRP sales, Ripple would not be profitable or cash flow positive.

Ripple’s quarterly sales of XRP, which were over $66 million in Q3 2019, are one of the company’s only revenue-generating events. You would think that Ripple’s partnerships with banks and money transmitters like MoneyGram are generating revenue for the company—but that’s not the case. Instead, Ripple actually pays some of its partners for these partnerships.

According to MoneyGram’s Q4 2019 earnings call, Ripple paid MoneyGram $11.3 million (in XRP) in the last two quarters of 2019. This is unusual; it is not common for a company to pay their partner significant amounts for work they are supposed to be collaborating on to produce revenue. This also goes without mentioning the initial $50 million that Ripple invested in MoneyGram to solidify their partnership. 

Is this an exit dump?

Ripple’s present and past activity signals that the company has trouble generating revenue. If it were not for its quarterly XRP sales, Ripple would not be a profitable company. What we are seeing play out before us is an exit dump, Ripple, and it’s previous team members are selling all the XRP that they can before XRP becomes worthless. That being said, you should do as their company does and get out of XRP while it still has any value—and don’t be surprised when the company has to close its doors because it is out of money.

New to Bitcoin? Check out CoinGeek’s Bitcoin for Beginners section, the ultimate resource guide to learn more about Bitcoin—as originally envisioned by Satoshi Nakamoto—and blockchain.

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