FRMO Corp, the publicly-traded risk management firm, has described the third-largest cryptocurrency by market, XRP, as an asset with significant return potential.
The firm showcases its bullishness on the crypto markets, especially XRP, in its latest letter to shareholders. Describing the digital asset, the firm says the fact that XRP is not mined like some others makes it a unique crypto asset.
The firm further describes XRP as one of the most intriguing digital assets due to its deflationary nature. In the letter, the firm FRMO Corp intensified the outstanding functionalities of XRP in terms of scalability, transaction speed and cost.
It’s generally known that XRP’s total supply is 100 billion, and for each completed transaction, 0.00001 XRP is destroyed. So, the firm averred that this could become a factor in the value proposition of the cryptocurrency once it gains mainstream adoption.
The letter reads in part as follows:
XRP, itself, is one of the more intriguing currencies, as it is explicitly deflationary. There is a modest cost for transacting in XRP, which is not actually paid to any intermediary. The fee, which is a very small fraction of a unit of XRP and which is used to protect the network, is simply destroyed.
Therefore, the number of XRP units is constantly decreasing. If the transaction velocity of XRP were to rise greatly, the number of currency units would decline greatly, thereby creating a substantial return even if the coin itself did not experience an increase in market capitalization. It would, however, experience an increase in value per unit.
Unlike other cryptocurrencies, XRP is not mined, and its validation system is closed to outsiders, which differs from the cryptocurrencies that are mined. The mined cryptocurrencies are open systems that welcome new participants. Nevertheless, XRP, at least theoretically, does have significant return potential.
FRMO also reveals that it’s mining Ethereum (ETH), Bitcoin Cash (BCH), Litecoin (LTC), among others, adding that its private partnership investments now hold positions in Bitcoin (BTC) and many other top cryptocurrencies.
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