Ripple CTO Emeritus David Schwartz has reduced his cryptocurrency exposure over several years despite helping develop the XRP Ledger. XRP’s network utility creates measurable demand, but low
The cryptocurrency industry’s latest warning about financial risk has come from someone who helped build one of its most established networks.
David Schwartz, Ripple’s CTO Emeritus and an XRP Ledger co-creator, said on November 10 that he had sold nearly all the digital assets he once owned because of his longstanding discomfort with risk.
His comments coincide with renewed pressure on XRP, which traded near $1.05 on November 11. They also expose a wider problem for crypto investors: institutional adoption can advance without delivering equivalent returns to token holders.
Schwartz’s November 10 disclosure on X, shared by Wu Blockchain detailed substantial reductions in his cryptocurrency holdings over several years.
He reported that his XRP balance had declined from approximately 26 million tokens to three million, while his Bitcoin and Ether positions had also fallen sharply.
His explanation was personal rather than a forecast of market direction.
“It’s the reason I’m not a billionaire,” Schwartz wrote about his aversion to risk, adding that he had never intended to maximize his wealth at any cost.
The transactions followed a longstanding arrangement to sell portions of his holdings when cryptocurrencies reached new price highs.
He separately disclosed selling approximately 2.5 million XRP during 2025, resulting in around $1.7 million in capital gains tax. Schwartz has also described arranging XRP sales through written plans agreed with legal counsel in advance.
His disclosures do not establish a sudden liquidation during November’s downturn.
Schwartz continues to hold Ripple equity, which he acknowledged represents more risk than he would ideally accept. His remaining exposure is therefore not a complete withdrawal from the industry.
The episode instead raises a question about how investors price the risks of participating in a rapidly developing financial technology sector.
Ripple’s expansion into institutional payments, custody and stablecoins has strengthened its commercial presence. Yet the XRP Ledger’s economic design places limits on how directly that activity affects XRP’s supply.
The network requires XRP for transaction fees and account reserves.
According to the XRP Ledger’s official documentation, the current mainnet base reserve is one XRP per account, with an additional 0.2 XRP required for many ledger objects.
These balances are reserved rather than permanently destroyed. Users can recover eligible reserves by removing ledger objects or deleting accounts.
Transaction fees operate differently.
The XRP Ledger’s fee mechanism permanently destroys XRP paid to process transactions, reducing the circulating supply incrementally.
The direct economic effect can be examined through a simple calculation.
At a hypothetical fee of 0.00001 XRP per transaction, one million transactions would destroy just 10 XRP.
Even at an illustrative market price of $1.06, that represents approximately $10.60 in token value.
The example is not a measurement of current network activity or the prevailing fee for every transaction. It demonstrates the scale of fee burning under the stated assumptions.
For transaction growth to generate substantial sustained buying pressure, the effect would need to extend beyond minimal fee consumption.
Potential mechanisms include institutions maintaining larger XRP balances, increased use of XRP as a bridge asset, or investors accumulating tokens in anticipation of future network demand.
Those outcomes require evidence from actual balances, payment flows and market activity. Transaction counts alone cannot establish them.
Ripple’s growing institutional business also creates confusion about where economic value accrues.
The company can generate revenue from services that do not necessarily require customers to maintain significant XRP positions.
Its RLUSD stablecoin introduces another model, in which the token is designed to maintain a dollar-linked value rather than appreciate with business growth.
The comparison below separates the relevant financial exposures.
Three Different Forms of Exposure Economic structure, liquidity and principal risk Ripple Equity Value driver: Company performance, ownership rights and private-market valuation. Main risk: Limited liquidity, valuation uncertainty and company-specific exposure. XRP Value driver: Market demand, network-related usage and investor positioning. Main risk: Price volatility and uncertain capture of ecosystem growth. RLUSD Value driver: Reserve backing and redemption at its intended dollar value. Main risk: Issuer, reserve, redemption and potential depegging risks. Structural comparison, November 2026. RLUSD holders do not automatically receive income generated by its reserves.An increase in RLUSD circulation could expand activity within Ripple’s broader ecosystem without creating equivalent demand for XRP.
Similarly, higher corporate revenue may improve Ripple’s business valuation while leaving the market price of XRP dependent on separate supply-and-demand conditions.
The distinction is particularly relevant during downturns, when investors reassess whether previously anticipated adoption has produced measurable token-level benefits.
XRP’s recent weakness reflects a market in which positive industry developments have struggled to offset selling pressure.
For investors assessing whether conditions are improving, three indicators provide more useful evidence than executive commentary.
None of these measures offers a reliable standalone forecast. Together, they help distinguish improving underlying demand from temporary market positioning.
Schwartz’s disclosures are not evidence that Ripple expects XRP to fall further. His selling occurred over an extended period and reflected a personal risk-management approach.
His comments nevertheless arrive at an uncomfortable moment for cryptocurrency investors. The industry’s technical progress remains visible, but the financial rewards from owning its tokens depend on mechanisms that are often less direct than promotional narratives suggest.
For XRP, the next meaningful market test is whether growing network and institutional activity produces sustained demand for the asset itself.
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