- Coinbase’s latest actions on XRP could signal a significant shift in the crypto landscape.
- Insights from XRPScan reveal that Coinbase is burning a portion of the fees it earns from internal XRP transfers.
- According to XRPScan, Coinbase is incinerating 20 XRP for every internal transaction, citing overpayment for gas fees as a contributing factor.
Coinbase’s unique XRP burning strategy could be an unexpected bullish move for the cryptocurrency, reducing supply and potentially boosting value.
Coinbase’s Bold Move: XRP Burning Explained
Coinbase recently made headlines by relisting XRP following Judge Analisa Torres’s ruling that it is not an investment contract. This relisting has brought an unexpected twist: Coinbase is burning 20 XRP as fees for every internal transfer. This practice was discovered thanks to data from blockchain tracker XRPScan.
Analyzing the Strategy and Its Implications
According to XRPScan, this fee-burning mechanism ostensibly serves to empty the wallets involved in the transfer. The move appears puzzling, given that the reserve requirement for wallets was reduced to 10 XRP some years ago. However, the overall market sentiment has been positively impacted by this approach. For instance, during a recent massive transfer of 39,401,162 XRP valued at $20,712,323 from an unknown wallet to Coinbase, the community noted the inherent benefits of overpaying for gas fees. Despite the higher costs, the strategy could have a counterintuitive advantage by tightening supply and potentially driving up XRP’s market value.
Positioning XRP as a Leading Payment Solution
Coinbase’s 20 XRP payment for gas fees translates to around $10.468 at the current price of $0.5234 per XRP. This compares unfavorably with transaction costs on competitor protocols, yet it underscores XRP’s role in high-value transactions. Especially for smaller retail payments, XRP continues to prove its utility, which it leveraged in its defense against the SEC lawsuit. As blockchain technology and digital assets evolve, XRP maintains its reputation as a top-tier crypto payment coin.
Conclusion
Coinbase’s practice of burning XRP fees reflects an innovative approach with potential market implications. By effectively tightening XRP’s supply, Coinbase might inadvertently provide a bullish boost to the cryptocurrency. This move, while unconventional, underscores the dynamic nature of the cryptocurrency market and presents an intriguing angle for analysts and investors alike. As XRP continues to stake its claim as a viable payment option, the market will be keenly watching the ripple effects of Coinbase’s strategy.
