Ripple CTO Advises Against FOMO Amid Expected Price Spikes for RLUSD at Launch

Key Takeaways

Ripple CTO warns against FOMO during RLUSD stablecoin launch price spikes.
RLUSD is pegged to the US dollar and competes with USDT and USDC.

As Ripple's RLUSD stablecoin launches, there may be an early supply shortage that could cause a temporary price spike, with some buyers willing to pay over the $1 target. David Schwartz, Ripple's CTO, advises not to buy FOMO, stressing that this is not an investment opportunity.

The warning came after a member of the crypto community saw RLUSD showing at $1,200 per unit on the Xaman trading platform, well above the intended $1 peg.

“Of course there is someone who is willing to pay $1,200/RLUSDfor a small fraction of one RLUSD. Tools will show you the highest price someone is willing to pay, even if it's just for a few. Maybe someone wants the 'honor' of buying the first part of RLUSD on the DEX,” Schwartz explained.

He said these price spikes were expected to be short-lived. Once the RLUSD supply stabilizes, the price should quickly return to the intended peg around $1.

Schwartz reiterated that the purpose of a stable is to maintain a stable price, not to be a speculative asset to make quick profits.

“Please don't put FOMO into your stable! This is not an opportunity to get rich,” he said.

Ripple is expected to launch its stable after that receiving final approval from the New York Department of Financial Services. According to Ripple CEO Brad Garlinghouse, the stable will soon be available on platforms in partnership with Ripple.

Designed to be pegged to the US dollar, RLUSD has undergone rigorous testing on both the XRP Ledger and Ethereum. The stable is intended to complement XRP, Ripple's native crypto asset.

With the new offering, Ripple aims to bridge the gap between traditional finance and decentralized finance (DeFi). This is expected to enhance the payment infrastructure and open up a wider range of use cases within the Ripple network.

Entering the stablecoin market, Ripple will compete with industry giants such as USDT Tether and USDC Circle, which currently dominate the stablecoin market with a market cap exceeding $140 billion and $ 42 billion respectively, according to CoinGecko.

Despite the strong competition, Ripple sees an opportunity for credible players to gain market share. Schwartz has predicted that the stablecoin market could exceed $2 trillion by 2028.