Ripple, the company behind XRP, may be overstating the digital token’s real market cap by as much as 47 percent, according to cryptocurrency data company Messari.
A Hole in the Plot
According to a new Messari report, the total circulating supply of XRP 00 is 21.8 billion. This differs significantly from data provided to third-party crypto data services such as CoinMarketCap, where the displayed circulating supply is around 41 billion XRP at the time of writing this.
The same is true for the cryptocurrency’s total market capitalization. The report suggests that the real market value of XRP is $6.9 billion against the widely reported $13 billion, based on the current USD-XRP exchange rate.
The report outlines that Ripple hasn’t shared any methodology or reference exchange data it uses in order to calculate the trading volume of XRP.
Additionally, more than 99% of the trading volume is apparently coming from overseas exchanges, where many of them have been suspected of wash trading.
Where Does the Difference Come From?
The reports states that 19.2 of the 41.0 billion XRP currently quoted as ‘in circulation’ may either be illiquid or subjected to ‘”significant selling restrictions.”
These include 6.7 billion XRP locked up on selling restrictions on co-founder Jed McCaleb.
An additional 5.9 billion XRP has been publicly committed but not donated to RippleWorks by the co-founder Chris Larsen.
The report also estimates 2.5 billion XRP held under selling restrictions on the wallet addresses of RippleWorks.
Lastly, the 4.1 billion XRP, which are sold through the company’s money services business called XRP II since 2016, could also be subject to re-selling restrictions.