A recent post from an anonymous user has sparked a debate in the XRP (XRP) community, raising questions about whether the cryptocurrency's price is being suppressed beyond the impact of the resolved SEC lawsuit with Ripple.
The post delves into allegations of coordinated manipulation. It points out the large amount of XRP held by Ripple, monthly sales, institutional involvement, etc., as potential factors.
Reasons for XRP's Low Price: Manipulation or Market Forces?
In December 2020, SEC filed a lawsuit against Ripple. The lawsuit revolved around allegations that Ripple conducted an unregistered securities offering by selling XRP. The lengthy battle, which is about to end, has significantly damaged XRP's price.
"It not only slowed XRP — it stole years of growth. While the market boomed, XRP sat on the sidelines," the anonymous user wrote in a previous post.
However, with Ripple's victory, speculation has emerged that other factors are behind XRP's poor performance.
"Big question. The SEC lawsuit clearly affected XRP's price. But what if that wasn't the only force holding it back?" the user posted.
The user discussed five key factors, starting with the massive amount of XRP Ripple holds. The user revealed that the company currently holds over 43 billion XRP in escrow accounts and releases a portion monthly, a mechanism initiated in 2017 to regulate supply.
Some argue that these sales are strategically designed to limit XRP's price growth, artificially keeping it low. However, the user emphasized that Ripple's CTO stated that the company's On-Demand Liquidity (ODL) transactions do not affect market prices.
Furthermore, the user noted some small wallets holding large amounts of XRP. Large transactions from these wallets lead to price drops, raising concerns about manipulation.
However, despite the correlation between these movements and price decline, there is no clear evidence of intentional control or interference.
Adding to the complexity, the user cited a scientific study. The study found a negative correlation between transaction structure and price, with a coefficient of -0.73. While this does not confirm suppression, it highlights the potential role of complex network dynamics in influencing XRP's price.
"Deep speculation — some believe large banks are buying low while spreading doubt. A theory? Institutions want XRP cheap before mass utility adoption. Sounds conspiratorial — but it keeps coming up for a reason," the post added.
Finally, the user explained that in 2017, during XRP's major price surge, network activity spiked. However, some community clusters shrank just before the significant price drop, and certain nodes became dominant in the network. This also raised concerns about market distortion.
"In my opinion, most of this is just rumors, speculation, and pattern chasing. No clear evidence of XRP price suppression beyond the SEC lawsuit. But the community's doubts are not unfounded — just not proven by compelling evidence... yet," the user concluded.
Additionally, some analysts also believe that the low price is part of Ripple's long-term strategy. The company uses this as a cover to avoid attracting too much attention while building its infrastructure.
Lawyer Refutes XRP Price Suppression Allegations
Despite numerous speculations, lawyer Bill Morgan refuted these claims. Morgan clarified that Ripple does not control 43% of the total XRP supply, as some believe.
"First, Ripple does not own 43% of the supply. Even CoinMarketCap reports that the circulating supply (excluding what Ripple holds in escrow) is 58.5%," he stated.
This means Ripple's influence is less dominant than speculated. Morgan also noted that Ripple's monthly sales from escrow accounts represent less than 1% of the token's monthly trading volume.
This is too small to create significant downward price pressure. He also emphasized the diminishing impact of releases from Ripple's escrow accounts over time.
Moreover, Morgan referenced the SEC vs. Ripple lawsuit. He emphasized that before filing, the regulator's 18-month investigation had not found evidence of Ripple's price manipulation.
"No evidence of price suppression beyond the cold impact of the SEC lawsuit. Ripple provided expert evidence in the lawsuit that XRP price volatility typically follows the cryptocurrency market, especially the price volatility of Bitcoin or Ethereum," Morgan commented.
Currently, whether Morgan's explanation will alleviate concerns remains uncertain. For now, the debate about XRP's price continues.
