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Altcoin News

Researchers Claim That Ripple (XRP) Has An “Overstated” Market Cap

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Ripple (XRP) may not be the second largest cryptocurrency after all. In the latest crypto news, we are seeing a new report from the crypto research group Messari which alleges that the altcoin‘s current market cap – is way less than the $13 billion number as estimated by CoinMarketCap.

According to the researchers, Ripple has a “significantly overstated” on the vast majority of crypto data services – and further estimate that the “real” market cap of Ripple is actually just $6.9 billion.

As the data from Messari shows, Ripple’s market cap would now make it the third-largest cryptocurrency (instead of the second) behind both Bitcoin ($62.9 billion) and Ethereum ($12.2 billion).

If you are questioning what is the reason for this discrepancy, Messari’s main argue is that the Ripple company – which is in a close link and owns the majority of XRP – does not actually provide accurate market information through its API.

More specifically, the researchers claim that in addition to the 59 billion XRP that the company (Ripple) owns – most of which is held in escrow and some of which is available for restricted sales – the company has distributed billions of XRP to people or organizations who have agreed to contractual restrictions on selling them.

The report shows:

“Combined, this means 19.2 billion of the 41.0 billion XRP currently quotes as “in circulation” may be illiquid or subject to significant selling restrictions. In reality, this estimate may prove to be conservative, as they belie XRP trading volumes which have consistently fallen well below that of EOS and Litecoin, two crypto assets whose current referenced market caps are a mere 17% and 15% of XRP’s, respectively. In addition, we believe the actual amount of “restricted” XRP in distributions to investors, banking partners, and team member may be significantly higher than our initial estimates reflect.”

If XRP slice of the pie is larger than it should be, its shareholders are not purchasing quite what they think they are when investing in the funds – and their returns won’t accurately track the underlying crypto economy accordingly.

However, this might only be a theory from Massari research and it is yet to be proven by Ripple (XRP).

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