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7 October 2022
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Ripple: XRP inflation is 5 times higher than that of Bitcoin

  • Messari analyst Florent Moulin has revealed that the supply of XRP tokens is growing much faster than other cryptocurrencies such as Bitcoin, Litecoin and Ethereum.
  • The inflation rate of XRP has been 20% in the last 12 months.

Messari analyst Florent Moulin has shared new data regarding the inflation rate of the top 10 cryptocurrencies. According to the data analyzed by Moulin, the XRP token has the highest inflation rate in this ranking within a period of 12 months.

XRP inflation rate compared to Bitcoin and Ethereum

Via his Twitter account, Moulin stated that XRP’s inflation rate is above 20% within the last year. With this, XRP has an inflation rate that is 5 times higher than Bitcoin’s inflation rate after the halving, as can be seen in the graph below. The supply of the XRP has increased almost exponentially over the last 12 months. In contrast, the inflation rate for Ethereum was at 4.7%, the inflation rate for Litecoin was at 5.1%, for Tezos at 13%, for EOS and TRON at 3%, and for Bitcoin (before the halving) at 6%.Ripple XRP Bitcoin BTC

Source: https://messari.io/chart/top-coins-inflation-FDF8C726

At the same time, Moulin has established a relationship between the distribution of the supply of a cryptocurrency and the performance of its price. In that regard, Moulin said the following:

Only 30% of XRP max supply has been distributed, vs 87.5% for BTC. BTC is up 20% since last year, XRP is down 47%.

Messari’s data and analysis are supported by Kyle Samani of Multicoin Capital Fund. According to Samani, XRP price is negatively affected by Ripple’s programmatic sales, and by that Ripple has a significant impact on the price of XRP:

The company has been steadily increasing their sales of XRP over the previous three quarters, likely inflicting downward price pressure on XRP. Savvy investors have known this for some time; however, for whatever reason the market is just now picking up the narrative and reacting.

However, Ripple has published several reports on how slightly the planned sales affect the market. Ripple has concluded that their share of the newly issued XRP is too small in relation to the total supply to affect the price of the XRP. In this regard, Ripple’s CEO, Brad Garlinghouse, said:

In the XRP community, Ripple is the largest owner, and we are the most interested party in the success of the XRP ecosystem. (…) Ripple can’t control the price of XRP anymore than a whale controls the price of Bitcoin.

In the past, Garlinghouse also emphasized that the sales serve several purposes, which are necessary to expand the use cases of XRP in the long term and thus increase the value of XRP. In a tweet he stated:

XRP sales are about helping expand XRP’s utility – building RippleNet & supporting other biz building w/XRP ie Dharma & Forte.

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