XRP Surges 38% as Confusion Over Circle Sparks Costly Sell-Off

XRP gained over 38% in two weeks after confusion over its competition with Circle led to public sell-offs.

Ripple, not XRP, targets the stablecoin market using RLUSD, a distinct asset launched to challenge Circle's USDC.

Crypto lawyer John Deaton confirmed XRP’s role is limited to the XRP Ledger and unrelated to stablecoin competition.

XRP has posted a sharp increase of over 38% in the last two weeks, outperforming other large-cap cryptocurrencies. This surge came amid renewed confusion over its role in the digital asset market. Dave Portnoy, founder of Barstool Sports, disclosed he sold his XRP holdings based on advice that Circle, the firm behind USDC, would be a major competitor. This decision proved costly as XRP quickly gained value.

John Deaton, a prominent crypto attorney, stepped in to clarify the situation. According to Deaton, XRP does not compete with Circle. Instead, Ripple, the company that uses XRP in some of its solutions, competes with Circle in the fintech space. He explained that Ripple is addressing the stablecoin market through RLUSD, its newly introduced asset, and not through XRP itself.

Clarifying Ripple's Role in Fintech

Deaton emphasized the distinction between the XRP token and the Ripple company. Ripple, like Circle, builds financial infrastructure and offers cross-border solutions. XRP, by contrast, is the native digital asset of the XRP Ledger. It is not designed to compete with stablecoins like USDC and does not function as one.

Adding further context, Deaton reminded that Ripple had previously been linked to acquisition talks with Circle. This indicates a level of strategic consideration rather than rivalry. The two firms operate in the same industry layer but serve different functions and markets.

Market Impact of Misinformation

The misinterpretation of XRP’s role led to a high-profile sell-off. Portnoy later acknowledged the mistake publicly, stating that the decision made him want to cry. This situation highlighted how a lack of clarity about crypto projects can impact investor behavior.

Ripple’s focus has shifted toward RLUSD as its entry into the growing stablecoin market. RLUSD will be positioned to compete with USDC and other stable assets, keeping XRP separate from this specific competition.

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