1/ The real history of XRP and Ripple's catch-22.
In 2015-2016, Ripple had all but written off XRP internally. (I was there. I remember.)
They focused on their institutional currency settlement product instead, as it was the "blockchain, not bitcoin" heyday. The tech worked!
2/ In 2017, the execs leaned into XRP's potential as THE global bridge currency for settlements (BTC for banks!)
There was a specific person brought in to "boost XRP liquidity" - The price mooned. Top alt of 2017.
We discussed why in this episode: unchainedcrypto.com/ripples-xrp-wh…
3/ In early 2018, I started Messari with @robustus.
We wanted to track the fundamentals of the wildly overheated market (actually considered starting an activist "Big Short" fund called Icarus) and XRP made no sense to us at the time, especially.
Jan 2018 is still XRP's ATH.
@robustus 4/ The reason for the XRP "hate" was simple.
It wasn't a necessary asset to serve as a global bridge asset based on its creation by Ripple Inc "fiat" - XRPs were initially called Ripples - and the supply dynamics. BUT it was interesting as a carrot to onboard bank customers...
@robustus 5/ Ripple basically paid customers to use XRP.
They onboarded new investors like Moneygram, who announced partnerships that "used" XRP, but Moneygram merely sold off its tokens to boost their own revenue. SBI Holdings in Japan invested in Ripple, and "used" XRP in the same way.
@robustus 6/ The logos were attractive, the "institutional usage" was there, the liquidity was high, and RIpple execs, employees, and investors were very happy. Same with the customers.
Retail investors loved the low "price" relative to BTC or ETH. But they WERE the liquidity.
@robustus 7/ It was a fucked dynamic starting in 2018.
The XRP price crashed. Crypto went cold for institutions. The SEC was paralyzed because XRP wasn't a security, but also *looked* shady. And Ripple itself had incentives and fiduciary obligations to turn the trade around! Tough spot!
@robustus 8/ Ripple ended up effectively killed in 2018-2020. Stablecoins burst onto the scene in 2018. Ethereum scaled and its dynamism, ecosystem, and customer base (actually retail) helped ERC stablecoins negate XRP's institutional potential.
Then in Dec 2020, the SEC sued RIpple.
@robustus 9/ I said at the time that the Ripple SEC lawsuit was bullshit. To the surprise of many, including the Ripple team itself, I was consistent that they were getting hosed and not given the ability to compete fairly.
That lawsuit, crippled Ripple / XRP for *critical* years.
@robustus 10/ Fast forward to 2024.
1. Ripple spent $150 million beating the SEC in court. Their legal team is exceptional and deserves its flowers.
2. The SEC is terrible, and would be better off shuttered at this point. They were wrong on the facts and spirit.
Comeback time for XRP?
@robustus 11/ There's a big problem now for Ripple as they attempt their comeback: time passed them by.
They got screwed. Stablecoins won. Legislation will soon codify that victory in the U.S.
XRP is drawing dead, as stablecoins grew two orders of magnitude during the SEC battles.
@robustus 12/ This is understandably infuriating for Ripple's team and shareholders, and their solution now is bidding up political influence to somehow repackage a 10 year old dream.
It's like a QB that suffers a gruesome injury, battles back, but doesn't have the arm or youth anymore.
@robustus 13/ The fake it til you make it strategy was clever, legitimate, and had narrow potential in 2017.
Perhaps Ripple could still today incentivize the onboarding of institutional customers with XRP carrots.
But that will only codify the dynamic: retail investors ARE the product.
@robustus 14/ I'm not sure what I'd do in the Ripple execs' position.
They got a shit draw and were blocked from executing their initial strategy, leading to an inferior product today vs. stablecoins.
I don't have any hard feelings (I hit them for political reasons), but XRP is trash.
@robustus 15/ I'm hoping this is the last I ever have to talk about that company and it's product ever again on X.
It's been a wild journey.
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