By Tobi Loba
Ripple, the San Francisco Blockchain tech that oversees the distribution of the third-largest digital currency by market capitalization, XRP, revealed in its recently released second quarter of 2020 XRP markets report that it has started buying back the cryptocurrency from the open market.
Ripple also revealed that programmatic sales still remain on hold. It said it maintained this decision to focus on over-the-counter (OTC) sales in order to provide more XRP liquidity for the On-Demand-Liquidity (ODL) customers.
These disclosures brought about a lot of questions from XRP community members concerning the prospect of the cryptocurrency. Many XRP enthusiasts continue to ponder on the significance of the new development in respect of the digital currency.
The Significance of Ripple Buying Back XRP: The Community Deliberates
A couple of hours ago, a Reddit user identified as alone_sheep, made the XRP community realize the significance of Ripple’s decision to start buying back the digital token XRP in the secondary market.
He’s of the opinion that the move is bullish for the digital asset. He wrote, “Ripple is making enough money from their business that they can now afford to buy back up XRP thus lowering supply and increasing demand and therefore the price.”
“They are still doing OTC sales, but given Ripple’s track record, these are all likely part of on-boarding contracts. Many of these companies will be holding onto the XRP they receive to utilize in future transaction flows.”
Other users also reacted in line with alone_sheep’s opinion, believing that such a decision is most positive and mutually beneficial for Ripple as a company and XRP as a digital token:
“A stock buyback can often be seen as one of the most positive things a company can do with their capital to reinvest in themselves under the opinion that the market has undervalued the price. (Not that I’m suggesting XRP is a “stock”). Let that sink in for a moment…”
Similar opinion states that Ripple is foreseeing a better price for XRP, which could have prompted its decision to start buying back the cryptocurrency.
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