XRP, the third largest cryptocurrency by total market value, was probably one of the worst performing coins of the crypto money industry last year. Having experienced the hardest drop among the top 10 cryptocurrencies, XRP fell about 95% from its peak in 2018. But what is the reason for XRP to fall steadily even though Bitcoin and other cryptocurrencies have recovered in 2020 and is this drop normal?
Why XRP Price Drops?
According to the analysis and report published by the crypto research firm Messari, the annual inflation rate of XRP is at the highest level compared to other leading cryptocurrencies. Compared to the previous year, the amount of XRP in the circulation increased by 20.5%. By comparison, the cryptocurrency that has the nearest inflation rate to XRP in the top 10 looks like Tezos. Despite this, it is seen that Tezos’ inflation rate is 10%. It can be useful to say that EOS has an inflation rate of 2.6% and Litecoin has a rate of 5.1%, in order to show how dangerous water XRP is swimming.
Although the inflation rate of Tezos is close to XRP, the increase of its price by 60% shows that there is no danger for now. The biggest reason for this is known as Staking with XTZs and more XTZ circulation means more Staking.
Ripple’s continual release of more XRP definitely continues to dig up investors.