Only recently, XRP price crossed the $1 threshold, despite the current legal battle with the Securities and Exchange Commission (SEC) and Ripple. The valuation of the crypto company in the secondary market stands at around $3 billion. But the total XRP holdings is said to be worth around $70 billion. The price of XRP fell to $1.34 over the past 24 hours.
CEO of Galaxy Digital’s Queries Ripple’s valuation
CEO of Galaxy Digital and former hedge fund manager, Michael Novogratz , tweeted about the disparity between XRP holdings and the value of Ripple. His tweet has generated several comments and reactions.
Ripple equity is ‘trading’ in secondary market at $2-3bn valuation. The $XRP on their balance sheet is worth approx $70bn. One price seems wrong. If $XRP price is saying settlement coming, the equity is crazy cheap. If not, the token seems expensive. Thoughts?
— Mike Novogratz (@novogratz) April 10, 2021
Leonidas Hadjiloizou, a crypto analyst, said that of the $70 billion valuation, $62 billion is locked in escrow. And in such situation, it should not be a part of the company’s equity till it is unlocked.
In 2017, Ripple had stated that they had locked 55 billion XRP in a series of escrow accounts. They stated that over the course of 55 months, 1 billion XRP would be unlocked monthly. This would serve as a maximum amount of XRP to be put into circulation.
If some of the 1 billion XRP are not used up during the month, the remainder would be put into a new escrow which would be released in the first month where there are no scheduled releases.
XRP crosses the $1 mark
Just last week, XRP price crossed the $1 mark for the first time in over 3 years. Due to this price surge, the market valuation of XRP soared to $47 billion. Since this month, XRP price rose to $1.49 (about 160%). This spike in XRP rice may have been due to the victories Ripple may have had in its lawsuit with SEC.