Friday, December 9, 2022

Ripple Market Cap Now Worth More Than Bitcoin… Sort Of

Ripple Market Cap Now Worth More Than Bitcoin… Sort Of

Ripple’s XRP is now the world’s number one digital currency by market cap. According to data provider Brave New Coin, its economy is today worth $32.46 billion USD. That’s compared to Bitcoin’s at $27.65 billion.

Also read: Unconfirmed Bitcoin Transactions May Present New Opportunities for Fraud

Read the Fine Print First

But wait: before anyone gets too excited at such a bombshell, we need to look at “total supply” vs. “circulating supply”. Brave New Coin (BNC) calculates market caps at total supply — meaning 99.99 billion XRP in existence.

Ripple logoOther comparison sites, like CoinCap and CoinMarketCap, calculate XRP’s circulating supply only — which is 38.3 billion. The reason for this is only that number of XRP are available on the open market.

XRP tokens are not “mined” gradually like bitcoins, and so they all already “exist”. Other than the 38.3 billion “available”, Ripple keeps the remainder of the tokens to itself, ostensibly as an investment in the project’s future and to fund further development. However, the XRP tokens do technically “exist”.

It’s necessary to use quote marks for those terms since we’re talking about digital assets. The English language isn’t even close to catching up with clear definitions for each type.

The total number of bitcoins is 21 million. Of that, 16.33 million have been mined so far — that number increases by 12.5 BTC every ten minutes, for now.

Market Cap A ‘Terrible Measure’

Brave New Coin CEO Fran Strajnar told Bitsonline that market cap is “really a terrible measure in this space”, referring to the disparate range of digital asset attributes.

“There’s no programmatic and accurate way to properly identify how much is in private hands or general supply. It could all potentially be in the public domain, so we’re measuring total supply.”

Strajnar added that Ripple was a “crazy beast” compared to other cryptocurrencies, hence the difficulties in presenting its value. He described BTC, ETH and XRP as “blue-chip assets” that should be displayed as a separate class to other assets.

XRP’s price rise over the past few weeks is still amazing, though. Japanese speculators, looking for new paths to wealth, are possibly driving the boom. Strajnar continued:

“The fact that people are buying Ripples at this price shows that institutional interest is coming in in a big way.”

XRP and similar assets could be considered as company shares, he said, where common stocks are traded while other classes are reserved or optioned for directors, employees, etc.

Ripple Still Performing Very Well

pumpDespite the $33 billion market cap, BNC still lists XRP at #3 on its ranking table, below bitcoin and litecoin. Even Ethereum’s ether, with an $8.48 billion cap, is at #4.

In other words, while the rise of XRP’s price per token is still amazing, different assets have completely different fundamentals — so a simple dollar total doesn’t mean much in reality.

“It’s all about liquidity, velocity, volatility, all sorts of blockchain statistics,” Strajnar concluded.

Have you ever traded XRP? What’s the appeal? Let us know in the comments.

Images via Ripple, Pixabay

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