While Ripple takes into consideration an IPO (Initial Public Offering), the cryptocurrency community is trying to figure out what effect it would have on the price of the Ripple's token, XRP. Some experts believe that the fact of Ripple's listing may actually devaluate the company's cryptocurrency.
IPO Ripple: XRP's boom or crash?
The CEO of Ripple, Brad Garlinghouse, said last week that there is a possibility that the company's IPO could take place next year.
After interviewing Cointelegraph some experts say that Ripple's listing will certainly affect the price of its token, XRP. Commentators, on the other hand, wonder if the IPO will reverse the token's fate by bringing new increases or if it will completely destroy the cryptocurrency.
According to an analyst, Rakesh Upadhyay, if after IPO Ripple does not achieve the results expected by investors, it will have a negative impact on the price not only of the company's shares, but also on its token's price.
"Initially, after the IPO, the market participants might be patient but they will soon seek results. When the results don't come through, it will hurt prices."
- states Upadhyay.
Even though it is a questionable issue, Upadhyay underlines that despite various contracts with large banks and other companies, Ripple is not showing significant progress. What is more, the mass sale of XRP (in the last quarter of 2019 its price fell) indicates that the company has problems with financial liquidity. The analyst explained that the company must have decided to sell tokens because it is not earning enough money to finance its business.
Allen Scott, on the contrary, believes that IPO would be a good way to test buyers' appetites.
"Many see Ripple selling XRP regularly as a recurring 'IPO' already sans shareholder rights... So this might actually hurt Ripple as it would put into question (...) the existence of XRP."
- says Scott.
Mati Greenspan, a former eToro analyst, is of a different opinion as , according to him, the IPO may allow Ripple to strengthen its position in relation to XRP. He believes that a course of events including the IPO would be positive because of the fact that it would get Ripple additional funding and fewer tokens would have to be sold.
Michael Arrington, the founder of both the TechCrunch and the Arrington XRP Capital hedge fund, instructed the investors to ignore the FUD during the IPO. According to him, IPO Ripple is great news.