Analysis

Exclusive: Mysterious “Whale” is Manipulating XRP Price

Good news : the price recovers quite well from the ‘Big Annual January Crash’. It is not to forget that, as long as the token has utility, XRP will always recover any crypto related crash. Today, this utility is mostly due its unique skills to solve the cross border payments problems. There are, however, a lot of other use cases for the XRP token. As long as these exist, this cryptocurrency will always have a place in our world and also a reasonable price. I think this is so important to say that it bears repeating. In this article I want to dig a little bit deeper into the price movements of the last weeks.

I often read the term ‘whales’ in context to the price development. Some people think it is all a big conspiracy and everything is controlled by a tiny group of so-called whales. I think there are enough reasons to believe that this is true. We spotted that South Korean officials did insider trading with public announcements and the bottom of the crypto crash matched the end of the first CBOE contracts. So it is true, there is influence from governments and big players. A true whale, however, exerts power over the price, just because of the sheer amount of tokens he possesses. Through selling and possible re-buying he can manipulate the price directly. So I took some time and did my research.

The first thing I discovered was a well researched thread in the xrpchat.com community (https://www.xrpchat.com/topic/17295-he-who-shall-not-be-named-is-dumping-his-position/). Someone found a huge account with over a billion XRP (https://bithomp.com/explorer/rDahLhHJaowRYn4hRkS9S2YpAeiTR8mjBF). This wallet transfers the tokens to this account (https://bithomp.com/explorer/rskcAQhZie8mB39FHuJuk1ZmBaF6RYZYNV), which is dumping XRP by the millions. He transfers it to another account and from there on to exchanges. Since the 9th January over 200 millions were dumped, and while I am writing this article, he is dumping more millions.

Who is this and why is he doing this? There are three main possibilities:

1. Jed McCaleb

The starter of the xrpchat.com thread indicates that it might be Jed McCaleb, the co-founder of Ripple, who left the company in hatred. There are a lot of reasons this could be him. However, another great researcher on reddit tracked down over 90% of XRP (https://docs.google.com/spreadsheets/d/17_Wgo4iwGoPB1JenxD5fHtJ0HQYLpb669zaNemPojG4/htmlview) and he probably found the real wallet of Jed. Which is this one: https://bithomp.com/explorer/rEhKZcz5Ndjm9BzZmmKrtvhXPnSWByssDv Why is this the real one? Because this account sells a fixed, uneven daily amount of XRP. It changes every week. This is exactly what Monica Long, Ripple board member, explained in this thread: https://forum.ripple.com/viewtopic.php?f=1&t=15885 The agreement between Jed and Ripple in the final settlement was, that he can sell a fixed amount of tokens, dependent on the weekly average of trade volume. So, it is highely unlikely that this account with over 1 billions dumping XRP into the market belongs to Jed.

2. Ripple or Ripple Executive

This huge account might be linked to Ripple or one of Ripple board members, early staff or one of the other co-founders. I highly doubt this, because it would be definitely not in the interest of these people to dump such large amounts of XRP in such a short time frame. Ripple has fixed agreements with market makers and they sold 0.5 basic points of volume daily during the third quarter. This is all transparent and mentioned in the quarterly reports. The loss of trust in Ripple would be way too huge if they would dump their XRPs in such a way. They would dig their own grave. And they have more than enough cash from the last weeks. They really don’t need it. Chris Larsen accounts, by the way, were also spotted by the Reddit researcher and you find his billions  there completely untouched.

3. Whale

This is the conclusion I draw after digging into this. It is a single whale, who got for whatever reason a LOT of XRP. It seems that he got them all in once. We can only guess who he is and why he got it. But he got them, he got more than 1 billion of it and he wants to sell them now. Before everybody rants against this big sea creature, try to put yourself in the same situation. Say you own over 1 billion XRP. The  price increases well over 3$. I guess you would cash out, wouldn’t you? So no hate against this whale – it is just the way how this world is.

More importantly, what are the consequences of this sell-off? Obviously, this is MASSIVE selling pressure and the market CAN NOT absorb it at once. It will lead to a drop in the price. Look at this chart:

So we can expect the price to plunge in the short-term. Eventually, however, the market can absorb it all. And then we will have three big advantages. The first one is, obviously, that the selling pressure is gone after he sold his XRP and the price can move up quickly. Very quickly. When the dumper decided to stop selling his XRP on the 18th January. But he got slower injecting XRP into the market, so there is still a correlation. When the dumper stopped selling his XRP in the early morning of 18th january (UTC)  the price moved up from 1.30 Usd to 1.60 Usd, which can be seen on the chart.

So the price will recover. And the earlier this whale will inject his XRP into the market, the earlier this selling pressure will be gone and we can focus on positive price movements. So the sooner we get rid of him, the better. The second big advantage is, that newcomers can get XRP to a fairly reasonable price. It will be the last chance to get XRP this cheap.

The biggest advantage, however, is the liquidity this sell-off brings with. Someone obviously has to buy all the coins he sells, right? So people from all over the world will buy XRP. Instead of one big whale sitting in the US possessing over 1 billion tokes, we now have millions of people worldwide who own and trade XRP. And this is what creates liquidity. This is what the whole thing with “sourcing liquidity with xRapid” means. People in, lets say Malaysia do own now good amounts of Ripple and will eventually trade it against MYR. So it creates liquidity in the XRP-MYR corridor.

This is the best scenario for Ripple and its tokens. Even though short-term price movements won’t look that well every time he sells, Ripple will rise stronger and better after he dumped his position.

 

Sources: https://www.reddit.com/r/Ripple/comments/7rgdmz/update_19012018_923_of_xrp_tracked_jed_mccaleb/

https://www.xrpchat.com/topic/17295-he-who-shall-not-be-named-is-dumping-his-position/

 

This post has been written by xrptalk_de,  and we decided to publish it because we, as the author himself, believe that it is important to educate  investors about the manipulations of the cryptocurrency market for a safe trading. Enjoy the interesting reading and check the author’s website if you can read German: xrptalk.de

2 Comments

2 Comments

  1. Adam Quinn

    January 21, 2018 at 8:15 am

    Hello my name is Adam and I am the author of the spreadsheet 🙂

  2. YAK050

    January 21, 2018 at 7:40 pm

    It might be possible that someone invests around 2 billion and then suddenly takes it out! So in my opinion it might be the last time that the price is going down like this.

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