A few days after obtaining the approvals in New York,
Ripple has warned that its stablecoin might experience volatility when it hits
the market. David Schwartz, the company’s chief technology officer, also
cautioned investors about potential supply shortages while advising against
fear-of-missing-out (FOMO) behavior.
High Pre-Launch Bids
Schwartz’s remarks came after reports surfaced of
unusually high pre-launch bids for RLUSD, a USD-pegged stablecoin designed for
Ripple’s cross-border payment solutions.
The volatility hints at heightened speculative
interest. But Ripple assured users in a post on social media X that RLUSD will
stabilize once it achieves equilibrium in supply and demand.
As RLUSD goes live, there may be supply shortages in the very early days before the market stabilizes. There actually is someone willing to pay $1,200/RLUSD for a tiny fraction of one RLUSD. Tools will show you the highest price anyone is willing to pay, even if it’s just for a… https://t.co/LOx4rGiiiJ
— David “JoelKatz” Schwartz (@JoelKatz) December 15, 2024
Schwartz revealed that pre-market bids were
artificially inflating RLUSD’s value. One bid valued a fraction of RLUSD at
$1,200, well above its intended 1:1 parity with the US dollar. Schwartz
attributed this anomaly to early traders seeking the symbolic honor of
purchasing the first RLUSD units.
“As RLUSD goes live, there may be supply
shortages in the very early days before the market stabilizes. There actually
is someone willing to pay $1,200/RLUSD for a tiny fraction of one RLUSD, he
wrote.
“Tools will show you the highest price anyone is
willing to pay, even if it’s just for a tiny bit. Maybe someone wants the
“honor” of buying the first bit of RLUSD on the DEX.”.
Regulatory Approvals
Ripple secured final approval for RLUSD from the New
York Department of Financial Services on Dec. 11. The company aims to use
RLUSD, alongside its XRP token, to enhance cross-border payments and improve
liquidity in global markets. The firm announced that exchange and
partner listings for RLUSD would go live soon, marking a significant milestone
for the blockchain firm.
“But rest assured, the price will come back to
very close to $1 as soon as supply stabilizes. If it doesn’t, something is very
seriously wrong. If you want to spend a lot of money to get a tiny bit of RLUSD
before anyone else does, you can.”
“But please don’t expect the price to stay over
$1 once things stabilize, which I expect they will do very quickly. Please
don’t…
