New findings by Messari, a crypto research firm, have claimed that Ripple exaggerated their market cap by $6.1 billion, taking it to the current established value of $13 billion.
Ripple’s Market Cap Clearly Exaggerated
In a report published by Messari, Ripple have allegedly inflated their market cap by about 47% of what it should originally be. This could lead to a change in the ranks of cryptocurrencies by market cap which would put Ripple ($6.9 billion estimated) in third place with Bitcoin ($63 billion) and Ethereum ($12.2 billion) leading the way.
Most leading crypto exchanges and service providers list Ripple (XRP) over Ethereum (ETH) and this could change in the coming days if these findings are proved to be true indeed.
Messari Claims Data of XRP in Circulation May Be False
Analysts at Messari have claimed that the company has distributed several billions of XRP to individuals or organizations who have agreed to sell them on some sort of contract-based agreements from the 59 billion XRP that the company owns and most of which is escrowed.
Messari is of the view that not all such agreements have been made public, which has led them to believe that around 19 billion XRP token worth $6.1 billion have been falsely included in ripple’s circulation chain.
Implications of Ripple’s Overstated Market Cap
To put it simply, the higher the market cap, the more bragging rights a company is expected to have. However, the inside story is much more complicated than this.
For investors, market cap is a big reason for them to invest in funds of any cryptocurrency and if XRP’s market share is not what it looks, shareholders might not be getting their investment’s worth from the returns they may have been promised.
Ripple Says Total Market Cap Valued at $31 Billion
Ripple, however, has brushed aside the Messari’s alleged claims, stating that it is based on “several inaccurate assumptions” and “an incorrect calculation of market cap.”
A Ripple spokesperson said:
“Not only does this report contain several inaccurate assumptions around lockups and selling restrictions, the entire report is based on an incorrect calculation of market cap. The term ‘market cap’ is always a very simple calculation: current price X total number of the asset = market capitalization.”
He further added:
“That puts XRP’s current market cap at approximately $31 billion. We believe that any other calculation of market capitalization for XRP is not a clear representation of the truth.”