David Schwartz said XRP markets already price expected Ripple sales, arguing the company absorbs lower proceeds instead of token holders. Bill Morgan said Ripple no longer sells XRP directly
Ripple CTO Emeritus David Schwartz has dismissed claims that Ripple’s XRP sales harm token holders, arguing that the company’s distributions do not shift financial losses onto investors. According to David Schwartz, market participants already price future XRP sales into the asset, making Ripple the party that ultimately bears the cost.
His comments came during an online exchange that examined Ripple’s business model and XRP’s role within the company’s ecosystem. The discussion gained traction after pro-crypto lawyer Bill Morgan addressed claims surrounding Ripple’s XRP sales.
According to Morgan, Ripple has not sold XRP directly to retail investors for several years. However, his statement prompted criticism from a Chainlink executive, who argued that Ripple mainly monetizes its pre-mined XRP holdings to finance operations, acquisitions, and shareholder returns.
The executive also claimed that every XRP sale transfers financial risk to token holders while Ripple and its shareholders benefit. Additionally, he argued that XRP no longer functions as an effective bridge asset because Ripple’s RLUSD stablecoin has taken over that role.
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Schwartz rejected those claims, explaining that they overlook how financial markets price expected events. He said investors who anticipate Ripple selling XRP in the future naturally factor those expectations into the token’s current value. Consequently, buyers purchase XRP at prices that already reflect anticipated selling pressure. Likewise, sellers also trade based on those same expectations, preventing future sales from creating an unexpected disadvantage for existing holders.
Moreover, Schwartz argued that Ripple receives less value whenever it sells XRP because the market has already discounted those future distributions. In his view, that makes Ripple the party absorbing the economic impact rather than investors. He added that anyone entering the XRP market understands the possibility of future Ripple sales. Therefore, those expectations become part of the asset’s valuation before any transaction takes place.
Besides addressing concerns over XRP sales, the discussion also touched on XRP’s utility within Ripple’s payment network. The Chainlink executive argued that stablecoins, including RLUSD, have largely replaced XRP’s bridge asset use case. However, Schwartz focused his response on correcting what he described as misconceptions surrounding market pricing instead of debating XRP’s broader utility.
The exchange reflects the broader debate over Ripple’s long-term business strategy and how the company manages its substantial XRP holdings. As Ripple expands services beyond XRP through products such as RLUSD, discussions about the relationship between the company and the token remain a recurring topic within the cryptocurrency industry.
Schwartz’s remarks reinforce Ripple’s position that its XRP sales do not unfairly burden token holders. Instead, he maintains that expected sales are already reflected in market prices, meaning Ripple accepts lower proceeds when selling XRP while investors transact based on information already available to the market.
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