The Ripple-USD (RLUSD) stablecoin reached a value of $1,200 per coin before launch, with CTO David Schwartz explaining the reason behind the pricing.
Ripple’s RLUSD launched on December 17, birthing a native stablecoin on the XRPL network. The launch sparked positive sentiments around the XRP ecosystem and contributed to a short-lived bullish push above $2.70.
Before then, RLUSD saw an unusual pricing on some wallets, with its valuation reaching as high as $1,200. Notably, this was abnormal, considering it is a stablecoin that should maintain a $1 valuation.
Community Discloses Abnormal RLUSD Pricing
Some XRP enthusiasts disclosed the abnormal pricing on X (formerly Twitter). For instance, a user shared a screenshot of the RLUSD’s pricing against XRP on the Xaman wallet, with 1 RLUSD valued at 511.20 XRP ($1,200 at the time).
Furthermore, a community figure confirmed the pricing, inquiring if it would stay that way until the launch, potentially pushing XRP to the lofty price. Notably, his comments align with a faction of the XRP community speculating that the RLUSD stablecoin will push XRP’s price higher.
Ripple CTO Provides Clarification
However, Ripple’s Chief Technology Officer David Schwartz explained the factor driving the RLUSD price spike using simple economics. He tweeted that the XRPL-based stablecoin will see price spikes in its early days due to limited supply and growing 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 suggested that a user was willing to pay $1,200 for 1 RLUSD due to the supply shortage, causing the system to revalue RLUSD to the highest buy order. However, he noted that this will stabilize over time as supply grows.
Interestingly, in a separate event, a trader lost $27,000 while swapping his XRP for the stablecoin. The Crypto Basic reported that a user swapped his 10,000 XRP for 100 RLUSD after his pre-launch order was filled upon the stablecoin’s market debut.
The swap valuation meant that the trader bought 1 RLUSD for $271, as XRP was trading at around $2.71 at the time. RLUSD claimed the $1 valuation upon launch, turning the user’s $27,100 into a mere $100.
Meanwhile, RLUSD’s price has stabilized around the $1 valuation. Per CoinMarketCap, the stablecoin trades at $1.01, with a total supply of $53.1 million.
DisClamier: This content is informational and should not be considered financial advice. The views expressed in this article may include the author's personal opinions and do not reflect The Crypto Basic opinion. Readers are encouraged to do thorough research before making any investment decisions. The Crypto Basic is not responsible for any financial losses.
