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He said: “I hated $XRP for years for its centralization and bad price performance. But now I truly believe $XRP will be one of the best performers in the next bull run. Most other large caps are either becoming irrelevant or have already pumped.”
As to the reasons why he believes this to be the case, the analyst lists three main reasons. He explains that XRP did not return to its all-time high for five years and had two cycles of price suppression. Additionally, he said, “Tokenomics proved to be ok since 70-80% relocked in escrow in last 3 years, Ripple didn’t dump like I feared”.
XRP Returned to Escrow, Reflecting the Prudent Approach
This comes after Ripple returned 80% of its 1 billion XRP into escrow, which it released earlier in August. In 2017, Ripple introduced an escrow system to lock 55 billion XRP tokens, about 55% of its supply. These were split into 1 billion XRP each escrow, unlocked monthly to ensure supply control, predictability, and ecosystem stability while meeting holder demands and supporting XRP’s growth.
The final reason why VirtualBacon is bullish on XRP is that he believes the demand for XRP and others are continuously increasing with the advancement of central bank digital currencies (CBDCs), FedNow.
It should be noted that the FedNow Service is a payment system the Federal Reserve offers to enable banks and credit unions to transfer funds for customers, similar to Fedwire and FedACH. Unlike a currency, it doesn’t replace any payment methods like cash. According to its website, the Federal Reserve hasn’t officially announced any decisions on issuing a CBDC and would require legal authorization for such a step.
In addition, investment focus for XRP-related assets under management (AuM) has surged by 127% this year, accounting for 12% AuM. The recent favourable ruling in the Securities and Exchange Commission (SEC) case against Ripple Labs, differentiating XRP from securities, increased investor interest. While this has prompted major exchanges to relist the token and boost liquidity, the SEC’s plan to appeal the decision on Ripple’s XRP sales raises new uncertainties.
XRP price trends downwards with the overall market at the time of writing, landing XRP below 60 cents again after it had experienced a rally to 84 cents post the court’s rejection of most of the SEC’s challenges.