CRYPTO MOVERS AND PRICES
Crypto had a relatively benign session this morning with the top 10 mixed. Spot volumes are about in line with the 30-day average.
CRYPTO STORY OF THE DAY
Blockchain-payments firm Ripple Network co-founder Jed McCaleb has been increasing his relentless selling of XRP tokens. McCaleb’s long-held “sell program” appears to have picked up in the last 2 months. We provide context to his activity and the strange selling dynamics of XRP founders generally. McCaleb was initially known for founding Mt. Gox, the first large crypto exchange. Infamously, Mt. Gox was at the center of the most significant hack in crypto's history, though McCaleb had since stepped away from the project.
In 2011, McCaleb became a founding member of a team that would build the Ripple Network and XRP. McCaleb left an active role with the company in July 2013, and went on to found the Stellar Network in 2014. By way of some form of agreement McCaleb has continued to receive XRP from Ripple since he left the team. For example, on May a wallet identified as his received over 55 million XRP ($11.5 million equivalent). McCaleb has consistently sold XRP daily for years. Since March, however, these dispositions seem to have accelerated and he has gone from selling under 1 million XRP a day to between 2.2 and 3.5 millionday. The wallet continues to hold an XRP balance in excess of 70 million and there's no sign that McCaleb's additional receipts of XRP are ending any time soon.
Takeaway: XRP is in a strange dynamic where all of the entities and individuals closest to the product are near-constant sellers. In addition to McCaleb, Ripple the company is an ongoing seller of XRP. In 3Q2019 the company sold over $65 million equivalent XRP before reducing that number in Q4 to closer to $ 14 million. It has been well documented and confirmed by executives that Ripple wouldn’t be profitable were it not for the XRP sales. Ripple CEO Brad Garlinghouse, had an amended class-action lawsuit brought about at the end of March accusing him of selling 67 million of XRP during the run-up in 2017 while making comments that might be interpreted to the contrary. Ultimately, this entire narrative, particularly Ripple's selling, is an uphill battle for the viability of the XRP token.