A token of questionable origin, XRP was the worst-performing crypto asset in the top 25 coins by market cap within the first quarter of the year, Messari reported. The coin has been knocked out of the top 3 coins by market cap, and currently faces historical lows of $0.18 per coin.
There are a number of potential reasons, both internal and external, that could have adversely affected XRP’s performance this year so far.
At the market level, panic over the consequences of the coronavirus pandemic played a key role in shaping the bearish sentiment among investors. However, beyond the virus, actions within Ripple (the company) may have also contributed to this slide.
“Early in the year, Ripple CEO Brad Garlinghouse revealed that Ripple would not be profitable or cash flow positive without selling XRP, indicating that its XRP sales were indeed helping to finance the business,” Messari noted.
Rippe’s sales of XRP have been an explosive issue within the crypto industry. On the one hand, Ripple has always been clear and transparent in revealing its sales, stating publicly that the company does not care much about the price of XRP, and that it does not intend to permanently end this practice. On the other hand, XRP holders—the ones affected by these token dumps—have been vocal on social media in expressing their discontent.
Messari also noted that uncertainty about the nature of XRP could be playing a major role in triggering a pessimistic outlook among investors. Ripple currently faces a class-action lawsuit that alleges XRP was unlawfully sold as an unregistered security under US federal law. Until the lawsuit is resolved, the question of whether XRP is a security will continue to linger and sow doubt.
But while the immediate future may look bleak for the XRP Army, there have been some positive developments for Ripple fans to cheer.
The company recently forged strategic partnerships to expand the ecosystem, including an expansion of its business in the US-Mexico remittance market, which could play an important role in the XRP adoption. Meanwhile, Seychelles-based crypto exchange Bitmex recently announced plans to offer its first XRP perpetual swap contracts, which may also help to stimulate XRP trading down the road.