Digital Currency prices have been correlated with Bitcoin, the first and the most famous cryptocurrency. But that would end soon as the market accepts the difference between these assets. As per Brad Garlinghouse CEO of Ripple.
On Wednesday, Brad Garlinghouse told CNBC’s “Power Lunch.”:
“There’s a very high correlation between the price of XRP and the price of bitcoin, but ultimately these are independent open-sourced technologies. It’s early, over time you’ll see a more rational market and behaviors that reflect that.”
Ripple is the name of the San-Francisco based company building a network for faster global financial payment. Meanwhile, XRP is a digital token that financial institutions on the network can use to transact quickly.
The company itself had a record quarter, signing 20 production contracts with the new firm. Brad Garlinghouse stated. Ripple declared a deal with the biggest bank in Kuwait, adding to the companies like MoneyGram that are now testing XRP for cross-border payments.
However, in that same period, XRP lost 70% of its value and was the worse performer amongst top cryptocurrencies. The whole sector took a beatdown in the first quarter and the market cap. For digital currencies fell by more than 50% in those three months.
Brad Garlinghouse stated:
“It’s still a nascent industry, the speculation in the market dominates the trading activity. I think it’s a matter of time until people better understand the different use cases.”
There are around 1500 digital currencies in circulation. The CEO predicted that 99% of those digital assets wouldn’t exist in 10 years.
He stated:
“There’s gonna be a bit of correction along the way here where a lot of the players in the space that don’t solve a real problem are going to get washed out.”
Some digital currencies have no proven use case, and they have been accused of fleecing investors through fundraising process known as ICO or Initial Coin Offering. The SEC has cautioned of the pump, and dump schemes shut multiple down and lately charged one supported by Floyd Mayweather and DJ Khaled with cheating.
He Included:
“The SEC is getting involved as they should because there have been frauds committed. We have been an advocate of yes the government should get included, the government should be guarding investors and companies, but there’s also cases of real utility.”
The issue of whether or not a digital currency is security has been a significant focus for the financial watchdogs. Mr. Jay Clayton SEC Chairman made it clear in March that all ICOs constitute securities. Brad Garlinghouse pointed out a couple of differences between XRP and outstanding securities, like stocks.
He continued:
Source: coindelite“If you own XRP, you don’t own rights to the profits or any dividends to the company. XRP has real utility.”
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