Messari researched the health and legitimacy of the XRP’s market capitalization, ahead of Ripple’s Q4 2018 report, using data from cryptocurrency exchanges and third-party cryptocurrency data services.
XRP’s liquid circulating supply could be overestimated by 48 percent, stated the report, making the actual market cap at $6.9 billion instead of the $13 billion currently as reported by CoinMarketCap.
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Messari stated that there could be significant, persistent sell-side pressure in the XRP market in addition to the 59 billion XRP held on Ripple’s balance sheet. Ripple’s market-making partners, a Ripple affiliated foundation, and Ripple’s co-founders, the length and structure of selling restrictions placed on them, which appears to have negotiated rate limits for sales based on exchange trading volume of XRP.
In addition to 2.5 billion XRP held by RippleWorks, which are reportedly under selling restrictions, it is also duly noted that circulating estimates could include illiquid positions like the 5.9 billion XRP that were pledged to the RippleWorks nonprofit foundation by the Ripple co-founder Chris Larsen.
The 4.1 billion XRP that was sold by XRP II, Ripple’s money services business, is believed to be subject to re-selling restrictions.
Without a disclosure from Ripple, the report also notes that it is impossible to make exact estimates, which it has not received yet by the time of publication. Messari also reported that Ripple has not disclosed the methodology or reference exchange data that it has used to calculate the XRP trading volume.
On Jan. 24, in the Ripple’s Q4 report, the firm had noted a decrease in token sales from $163 million in Q3 2018 to $129 million in Q4 2018.