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Cryptocurrency investors are consistently dissatisfied with one particular altcoin, XRP. Whenever there is news about XRP, investors now agree that it will not significantly impact the price. This is because they are aware that Ripple holds more than 40 billion of the supply. Ripple’s CTO David Schwartz recently shared his personal opinion on the burning of the 40.7 billion XRP held in escrow.
How Could 40.7 Billion XRP Be Burned?
Ripple CTO David Schwartz shed light on the burning of XRP held in Ripple’s escrow accounts, addressing concerns within the XRP community about the company’s cryptocurrency management. The community, which currently sees more than 40.708 billion XRP held in escrow accounts, was eager to understand the mechanisms behind the potential burning of these reserves.
Schwartz detailed how Ripple could use the “blackholing” system to effectively burn the XRP, making the related accounts inaccessible and thus preventing the XRP from entering circulation unilaterally.
This response came amidst growing dissatisfaction within the XRP community, due to Ripple’s significant involvement with the cryptocurrency and its practice of periodically releasing XRP from escrow accounts on the first day of each month.
What Does the Burn Narrative Imply?
The discourse surrounding the burning of XRP escrows has been intensified by recent debates in the cryptocurrency market, including allegations of price manipulation through programmatic sales by a crypto company. These events have fueled the disappointment of XRP enthusiasts who believe Ripple’s actions have affected the market environment and potentially reduced the value of the cryptocurrency.
Investors are not unjustified in their concerns. The price of XRP has not reached the desired level for years, with price increases remaining extremely limited. On the other hand, when there is a downturn, the price of XRP falls faster than other cryptocurrencies. Since recoveries are very slow, XRP investors miss out on other opportunities by staying in XRP.
Now that Schwartz has clearly stated that the power to burn altcoin XRP lies with Ripple, the community may put more pressure on Ripple to divest from XRP.
