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- The clarification from Ripple CTO David Schwartz followed criticism from analyst Vincent Van Code, who argued that XRP’s market cap is misleadingly calculated based only on circulating supply.
- Ripple continues to expand its institutional footprint, recently completing a $1.25 billion acquisition of Hidden Road and a $1 billion purchase of GTreasury.
Ripple CTO David Schwartz has cleared the air over Ripple’s XRP holdings and whether they can be liquidated all at once at the company’s will.
The blockchain firm holds a massive 35 billion XRP in escrow accounts, distributed across 14,000 contracts. These escrow contracts have been designed to manage the token supply and prevent massive inflows effectively.
Ripple CTO David Schwartz Responds to Doubts Over XRP’s Valuation
A debate has emerged within the crypto community over the accuracy of XRP’s market capitalization. Market analyst Vincent Van Code argued that it is misleadingly calculated based only on the 65 billion circulating tokens, excluding the 35 billion XRP held in escrow.
Van Code compared this to Bitcoin (BTC), where the full 21 million supply is counted in its market cap, despite over 1 million BTC being held in Satoshi Nakamoto’s wallet and several million more considered lost or inactive. He claimed that excluding Bitcoin’s inactive coins could reduce its market capitalization by up to 15%.
Thus, he called the existing valuation methods “a pointless lie you were programmed to think is important by the likes of Binance.”
Ripple CTO David Schwartz clarified that XRP tokens held in escrow remain locked and cannot enter circulation until their scheduled release. However, he noted that Ripple could technically sell the rights to future token releases or transfer ownership of the escrow accounts themselves. In his message on the X platform, Schwartz wrote:
Ripple could sell the right to receive the tokens released from escrow or even sell the accounts the escrows complete into. But the XRP still can’t circulate until their release dates.
The latest development comes within a week of Ripple CTO David Schwartz questioning the U.S. SEC’s stance on Ethereum’s classification, reigniting debate over the regulator’s inconsistent approach to defining which cryptocurrencies qualify as securities, as reported by CNF.
Ripple holds roughly 35 billion XRP in escrow across more than 14,000 contracts, which control token release and prevent sudden market oversupply. The total XRP supply is capped at 100 billion tokens, with about 65 billion currently in circulation.
Pushing Ahead With Greater Institutional Reach
Blockchain firm Ripple has been working ahead with institutional expansion through some key acquisitions in recent times. It has become the first company in the crypto industry to own and operate a multi-asset prime brokerage following its $1.25 billion acquisition of Hidden Road, now rebranded as Ripple Prime. The deal marks Ripple’s largest acquisition to date.
Earlier this month, the company also finalized a $1 billion purchase of GTreasury, signaling its expansion into the multi-trillion-dollar repo and corporate treasury markets.
