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Ripple Sold $163 Million XRP in the Last Quarter
XRP is a hot commodity (or security?)
In its quarterly report, Ripple Labs disclosed that it sold more than $163 million worth of XRP tokens to investors. However, these sales accounted for only a half of a percent of XRP’s total trading volume during the quarter.
During this period, XRP has been one of the top performing tokens. The price currently sits at around $0.457 which is very near to where it began the quarter. This was during a time when many cryptocurrencies lost a significant portion of their value.
Below is a graph comparing how XRP faired against the overall market during the quarter.
Growing sales in the bear market
Ripple had staggering sales growth over the sequential quarter. In the second quarter of this year, the company only sold $73.5 million. This represents more than 120% growth in just a quarter.
If you compare the sales results to the same quarter last year, Ripple grew its sales by over 210%. This is especially notable because the third quarter last year marked the start of the historic bull market.
The biggest driver for XRP’s sales growth was greater institutional demand for the token. It has been widely publicized that institutional investors are becoming ever more involved in cryptocurrencies and it shows in Ripple’s financial results.
Financial Institutions Worldwide Think Central Banks Should Issue Digital Currencies
Majority on board
According to a new study conducted by IBM Blockchain World Wire and the Official Monetary and Financial Institutions Forum (OMFIF), over half of financial institutions around the world believe central banks should issue their own digital currencies.
The study included 21 different central banks around the world ranging from those that are actively engaged in researching and trialing central bank digital currencies (CBDC) to those that are not currently active in this field.
However, even though a majority of the respondents believe central banks should issue their own digital currencies, the respondents were split on how the governments should issue their own digital currencies.
Not a question of should, but how
Though most of the report had a clear consensus, central banks couldn’t decide on what the most effective way is to proceed with issuing a CBDC.
With a CBDC, a number of questions arise but most popular was the question: who stores the digital currencies? Though respondents proposed many different storage solutions, they could not agree on a network structure.
Privacy a must
Still, despite the disagreements on where the digital currency is stored, almost all respondents agreed that privacy is necessary for their citizens.
This follows closely with Justin Ehrenhofer’s recent post that explains why the world needs privacy to not only protect individuals but also to ensure businesses can operate efficiently.
You can read his post on privacy here.
Scholars Conclude Pump and Dump Groups are Bad for Crypto
Is that surprising?
Three students, two from the University of Florida and one from Princeton, have published a paper detailing pump and dump groups and their effect on the crypto market. As you may have guessed, the researchers concluded that these sort of groups are a sore spot for the space.
The paper describes how pump and dump groups operate to manipulate the market:
How they operate
“In the cryptocurrency market, manipulators often organize “pump groups” using encrypted messaging apps such as Telegram. They create Telegram channels and invite other investors to join. They frequently advertise on social media platforms to attract investors. A Telegram channel operator can post messages for other members to read. For a planned pump, the operator announces the target date, time, and exchange, usually at least one day in advance. However, they do not disclose the identity of the target token until the scheduled time. Members also receive multiple reminder messages before the announcement of the token symbol. As we show in this paper, a typical cryptocurrency P&D lasts for only several minutes. Therefore, it is reasonable to believe that Telegram channel members are important participants in P&Ds.”
What can be done
Sadly, wherever there is the opportunity to make money, someone out there will take advantage of it. Pump and dump groups are definitely not harmless and result in a group of investors being left with little to nothing.
The first step in mitigating pump and dump groups is awareness. Investors need to be smart, anyone recommending a sure-fire investment maybe looking to take advantage of you.
Exchanges have been cognizant of this issue. Most exchanges that used to have chat boxes removed them for this reason. Exchanges have also shown willingness to roll back trades if market manipulation has occurred.
Bitfury Could Be Considering an IPO
According to a Bloomberg report, cryptocurrency mining startup Bitfury could be on the brink of an initial public offering (IPO) announcement.
Allegedly, Bitfury has already reached out to different investment banks around the world to consult on the process and more importantly, decide which market – Amsterdam, London, or Hong Kong – suits the company best.
Along with this, Bitfury is weighing different options including whether to raise debt or to sell a minority stake in the company. If it does choose to sell equity via an IPO, Bloomberg’s sources say the firm could be valued anywhere from $3 to $5 billion.
A rough road
Despite recording revenues of about $450 million for the past 12 months through March of this year, the bear market has likely brought a slump in sales for the mining business.
Because of this uncertainty, a handful of investment banks are avoiding advising cryptocurrency-related companies on topics such as IPOs.
However, if confirmed, Bitfury would join its Chinese competitor Bitmain in preparing to IPO.