Last week, Ripple CEO, Brad Garlinghouse, hinted that the company may go public with an IPO within the next 12 months. While some commentators believe this would be good for XRP, Boom Bust’s Christy Ai argues that Ripple going public would have profound implications on the altcoin’s price.
Prepare For A Nauseating Devaluation
According to Christy Ai, Ripple has been selling XRP tokens to raise funds. In fact, she pointed out that the company has sold XRP worth $1.22 billion since 2016. If Ripple goes public and sells shares, Ai predicts that XRP could “potentially be worthless, obsolete”.
Ripple is slowly establishing itself as the go-to provider for global remittance infrastructure. Most of Ripple’s technology taps XRP as a bridge currency, boosting the utility of the token. Nonetheless, Ai believes half of XRP investors are mainly interested in XRP with hopes that they will make gains in the future and not because of its actual utility. In other words, they are holding the digital asset as an investment. As such, XRP could experience major devaluation, despite having a real-world use case:
“Back when it ballooned to $3, or even now when it’s at 22 cents, that value as a utility token, it’s not worth 22 cents. So, we’re expected to see a major devaluation even though it does have a utility purpose.”
Uncertain Future
Editorial director of the American Institute for Economic Research, Jeffrey Tucker, was a guest at Boom Bust where he spoke to Christy Ai. However, he sees things differently. Regarding what XRP is actually worth, Tucker believes this is dependent on what it is presently buying and selling for. Moreover, due to the intricate nature of cryptocurrencies, it is quite impossible to accurately predict the future price of XRP. He opined:
“Anything could happen, XRP could fall to zero but it could also be worth a million dollars. The same thing you could say about bitcoin and all the other versions of bitcoin out there. Crypto is a complicated technology, it can’t be valued the same way you’re valuing stocks.”
Tucker further noted that XRP is mainly used for international payments. The idea behind Ripple creating XRP was to help overcome the problems associated with traditional finance and to allow the use of blockchain technology to introduce new efficiencies. Thus, investors own it to use it or to benefit from the increased valuation that comes with other people using it.
But, this is very different from a security which gives investors actual ownership rights in the company that’s issuing the token. In his view, an IPO will fit perfectly with Ripple’s long game strategy to work alongside traditional finance. He expects them to work in parallel and, as a result, he believes a Ripple IPO will not affect the valuation of XRP.
The post Why Boom Bust Anchor Christy Ai Thinks XRP Is Poised For ‘Major Devaluation’ appeared first on ZyCrypto.
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