Ripple CTO Emeritus David Schwartz has joined in the recent debate about the impact of $XRP sales by Ripple on the holders of the leading altcoin.
While growing speculation about this move suggests that token holders often end up as victims of such actions by Ripple, Schwartz has publicly dismissed these claims, noting that the company’s $XRP sales do not come at the expense of token holders.
Ripple’s business model questioned
Schwartz aired his views in response to an ongoing debate that started after pro-crypto lawyer Bill Morgan mentioned that Ripple sells $XRP directly to retail investors, noting that the company has not done so for years.
The statement triggered a debate when a Chainlink executive argued that Ripple primarily monetizes its pre-mined $XRP holdings to fund operations, acquisitions, and shareholder returns.
The Chainlink executive went further to declare that every time Ripple sells $XRP, the company essentially shifts the costs and risks to $XRP holders while the company itself and its shareholders enjoy the benefits.
He further mentioned that $XRP does not serve as a bridge asset, claiming that stablecoins such as Ripple’s RLUSD have overtaken that use case.
Schwartz clears misconceptions
Schwartz argued that the claims are misguided, explaining that the actual cause of most negative outcomes is solely dependent on investor sentiment.
He explained that if investors reasonably expect Ripple’s future $XRP sales to negatively affect the price of the asset, such expectations are already reflected in today’s market price.
According to him, this causes buyers to purchase $XRP at a lower price to account for those anticipated sales, and they are likewise expected to sell at correspondingly lower prices later.