In line with a recent report by a crypto analysis firm named ‘Messari’, revealed that the crypto market capitalization of Ripple [XRP] token might be overvalued by a max amount of $6 Bln.
Ahead of Ripple’s [XRP] Q4 report in 2018, Messari researched the “health and legitimacy” of the XRP’s capitalization employing information from cryptocurrency exchanges and 3rd party cryptocurrency data services.
The report added that Ripple’s liquid circulating supply may be overestimated by around 48%, summing up the “actual” market capitalization at $6.9 Bln rather than the $13 Bln presently reported on ‘CoinMarketCap‘. Explaining further Messari added:
“In addition to the 59 Bln XRP supply stored on Ripple’s record sheet… there might be vital, persistent sell-side pressure within the XRP market depending on the length and structure of marketing [selling] restrictions placed on Ripple’s market ensuring partners, a Ripple affiliated foundation, and Ripple’s co-founders, all of that seem to possess negotiated rate limits for sales based on exchange trading volume of Ripple [XRP].”
Messari outlined that circulating estimates might embrace illiquid positions like 5.9 Bln Ripple that were pledged to the RippleWorks non-profit foundation by Ripple’s co-founder named ‘Chris Larsen’, additionally to 2.5 Bln Ripple [XRP] held by RippleWorks, that are reportedly under selling ‘restrictions‘.
Messari conjointly added that 4.1 Bln XRP that was sold-out by Ripple’s money services business, XRP II, might be subjected to re-selling restrictions.
The report explains that it’s not possible to make precise estimates without any disclosure from Ripple, that it had not received by the time of publication. Messari conjointly states that Ripple didn’t disclosed the methodology or reference exchange ‘information‘ that it uses to calculate the Ripple’s trading volume.
In Ripple’s ‘Q4 report‘, revealed on 24th Jan., stated that the firm noted a decrease in token sales from $163 Mln in Q3 of 2018 to $129 Mln in Q4 of 2018.