Galaxy Digital Founder, Mike Novogratz has taken to Twitter to point out the massive disparity between Ripple’s estimated equity price and its XRP holdings. “Ripple equity is ‘trading’ in secondary market at $2-3bn valuation,” he wrote. However, “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?”
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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
At the time, the statement explained that: “this provides an upper limit on the amount of new XRP that can be brought into circulation. The amount of XRP actually released into circulation will likely be much less than this.”
According to CoinTelegraph, Ripple’s equity would be “considered undervalued” if the amount of XRP held by the company is reduced without a drop in the price of XRP.
Ripple’s Entanglement with the SEC May Actually Be Contributing to the XRP Price Rise
The recent discussion about the discrepancy between Ripple’s valuation and the value of its XRP holdings seems to have been brought into the spotlight by recent increases in the price of XRP. In spite of the ongoing lawsuit between Ripple and the SEC, the price of XRP has hit some of its highest points in years.
A number of analysts believe that certain rulings in the lawsuit are actually partially responsible for the rally. For example, the price of XRP saw an increase after it was granted access to the SEC’s internal discussions about whether or not XRP was a currency. The court denied the SEC the right to disclose the financial records of Ripple CEO Brad Garlinghouse and another executive member of the company.
At press time, XRP was trading at $1.34, which is 65 percent lower than its all time high of $3.84 and nearly 500% more than its price on January 1st, 2020 ($0.23).
