The market capitalization of distributed ledger tech company Ripple's XRP market could be overvalued by up to $6 billion, according to a current report from crypto analytics firm Messari.
The report says the XRP's liquid circulating distribution could be estimated by 48 per cent, putting the"actual" market cap at $6.9 billion instead of the $13 billion presently reported CoinMarketCap. Messari says that:
"Along with the 59 billion XRP held on Ripple's balance sheet... there might be substantial, persistent sell-side strain in the XRP market based upon the duration and arrangement of selling restrictions placed on Ripple's market making partners, a Ripple affiliated base, also Ripple's co-founders, all which appear to have negotiated rate limits for earnings based on trade trading volume of XRP."
Messari notes circulating estimates could consist of illiquid positions for example 5.9 billion XRP that were vowed to this RippleWorks nonprofit base by Ripple co-founder Chris Larsen, along with 2.5 billion XRP held by RippleWorks, which are allegedly under selling restrictions.
Messari also believes that 4.1 billion XRP which has been marketed by Ripple's cash services industry, XRP II, could be subject to re-selling restrictions.
The report notes it is not possible to make specific estimates without a disclosure out of Ripple, which it had not obtained by the period of publication. Messari also claims that Ripple failed to disclose the methodology or reference exchange information it uses to figure out the XRP trading volume.