The XRP community recently erupted with a video dubbed, "What is wrong with XRP," where the author names three reasons why popular cryptocurrency is not a good investment.
Long story short, the reasons behind this thesis are that the role of XRP, which was supposed to be an intermediate cryptocurrency for cross border payments, has now been replaced by stablecoins, which are more suitable. The fact that Ripple recently launched its own stablecoin, RLUSD, now seems to add to this argument.
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The second reason is that Ripple now plans an IPO, which shatters XRP's role as beta to the crypto company's performance. The third reason is that Ripple holds a lot of XRP, over 38 billion coin to be exact, and sells it to fund their operations. This is why, the author of the video insists, XRP is not a good investment.
To counter these claims, Ripple CTO David Schwartz himself addressed them, stating that while you do not need to hold XRP to use it for payments, someone else does, which supports liquidity on the market.
I think its first point is completely wrong. It's true that you can use XRP to make payments without holding it, which is good because it means you aren't exposed to its volatility if you don't want to be, it doesn't follow that people won't hold XRP.
For one thing, the only…
He also disputed the notion that XRP's price is solely driven by ecosystem changes or hype, using historical XRP/XLM price charts as evidence to question this claim. Previously, Schwartz highlighted how the price of the Stellar token follows the performance of XRP.
Source: CoinMarketCap
This further confirmed the convergence between two assets, when one of them serves as beta and plays catch up in the eyes of market participants.
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In the end, Schwartz suggested that holding XRP can be advantageous for reducing the number of currency exchanges needed, enhancing transaction efficiency. In his opinion, it makes sense to hold XRP if one does not know which currency is needed for your payment. Considering how many stablecoins there are, holding only XRP as the sole intermediate asset still makes sense.
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