Mike Novogratz, the founder and CEO of Galaxy Digital has expressed reservations over XRP in 2020. This is mainly due to supply concerns as Ripple Labs, the company behind XRP has routinely issued its tokens unlike the one-off activity of other cryptocurrencies. The so-called Ripple issuance has been subject to debates and even court action with a litigant terming it a “never-ending ICO”.
Ripple in A Proving Phase
Novogratz likened the Ripple token supply structure to continuous sale of stocks which would impact the price of such investment instruments. In a February 6, tweet, he wrote that XRP is still in a proving phase and shouldn’t hope to make a mark as a utility for storing value. He maintained that Bitcoin has already taken that path so it will be difficult for another cryptocurrency to make impact as a value storing instrument.
4. XRP and many other cryptos, like $eth are still in the ‘proving’ phase. They aren’t going to succeed as solely a store of value as $btc has taken that lane. $xrp does have its own fervent community (largely in Asia) but has a large supply to absorb (some 57 percent or so).— Michael Novogratz (@novogratz) February 6, 2020
In an earlier interview in Registered Investment Advisors (RIA) forum, he had raised concerns that Ripple Labs, the company behind XRP holds a large proportion of the token. He said that 60 billion XRP tokens is just too much for the company to hold.
“When I’m buying a stock, if I know [someone’s] selling $10 billion-worth of it at some price, it makes me less excited to buy the stock,” he said.
The Ripple CEO, Brad Garlinghouse disagreed with the opinion that XRP would have a lackluster performance this year. He cited that XRP had outperformed Bitcoin and many other tokens in the coin market.