Weiss Ratings: Ripple dumps XRP price and Ethereum is inferior to competition

  • The independent rating agency Weiss Ratings has condemned the monthly XRP sales by Ripple.
  • Furthermore, Weiss Ratings is of the opinion that Ethereum is inferior to other projects, e.g. Cardano, in terms of infrastructure.

Many projects of the cryptocurrency market try not only to provide an alternative means of payment, but also to solve complex problems of companies, people and the third world by using further components such as smart contracts. Weiss Ratings provides a rating that evaluates digital assets in different categories and provides a first overview of the available cryptocurrencies.

Ripple’s monthly XRP sales are not conducive to the price

Ripple has committed to release 1 billion XRP per month from the company’s escrow account for sale since December 2017. Exactly one billion XRP will be released from the escrow account and offered for sale on the first day of each month. All released XRP that could not be sold are returned to the escrow account.

This procedure has been discussed in the Ripple Community for a long time and is suspected to have a negative influence on the price of XRP. Weiss Ratings states on Twitter that the XRP released at the beginning of 2020, worth almost USD 192 million, will have a negative impact on the growth of XRP (freely translated):

2020 at #Ripple begins with a further release of #XRP tokens worth $192 million as part of a planned incentive scheme. These constant dumps that Ripple makes are not helping the price of XRP, that’s for sure.

Industry experts describe that the ongoing sales increase the selling pressure on XRP. This could force XRP owners to sell their stock. Ripple has made it clear on several occasions in the past that Ripple has no influence on the price of XRP and that both entities exist independently of each other.

However, there is another voice, Grayscale Investments, who in a study found that Ripple is still more centralized than Bitcoin or Ethereum. XRP sales declined to $66.2 million in the third quarter and were $251.5 million in the second quarter. Ripple had also announced that it would significantly reduce sales in the coming quarters.

According to the observations of some industry experts, more than 90% of the released amount was returned to the escrow account in the fourth quarter of last year. However, for a final confirmation of these developments, it will be necessary to wait for Ripple’s financial report.

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Cardano making better progress than Ethereum

Weiss Ratings also praised Cardano’s performance last year. Cardano is making particular progress in building an effective infrastructure, as they are using their financial resources in a targeted manner to pay the best developers for their work. Weis Ratings further stated (freely translated):

Paying developers to build infrastructure for #crypto is a good idea – that’s what #Cardano does, and #Ethereum doesn’t. On chain treasuries make sense, especially for smart contract platforms. We wonder why they’re so controversial.

Although these statements have caused heated discussions, Ethereum is still the number one platform for the development of decentralized applications. According to the latest data, there are currently 2,146 dApps on the Ethereum blockchain.

Charles Hoskinson, founder of Cardano, describes that Cardano wants to oust Bitcoin from the first place this year and pushes the commercialization of the project. Cardano has entered into a partnership with the advertising agency McCann to make the project known worldwide and build a user base of one billion people over the next year. However, it remains to be seen whether these forecasts can be realized.

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About Author

Collin is a Bitcoin investor of the early hour and a long-time trader in the crypto and forex market. He's fascinated by the complex possibilities of blockchain technology and tries to make matter accessible to everyone. His reports focus on developments about the technology for different cryptocurrencies.

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