XRP is showing significantly higher Hype-to-Activity ratios than other large cryptocurrencies in the market. The Hype-to-activity ratio is a measure of the number of hashtags (#) of tweets the cryptocurrency has in comparison to the trade volume in units of one million US dollars.
In a report by The Tie.io, XRP showed significantly higher hype activity than its actual market performance. While this is not entirely surprising, the report is worrisome for the very reason that generic hype can be misleading. Twitter is certainly a controversial platform because of the ability of scam bots and FUD stompers to create illusions.
Ripple Lab’s XRP showed the most distorted activity among major coins. Other major cryptocurrencies like Bitcoin and Eth have relatively consistent hype-to-activity ratios. In total, this survey touched on the top 450 coins. Indeed, a number of less popular coins showed similarly high hype ratios. Regardless, XRP is still the standout case because of its profile in the market.
The Difference Between Major Coins
To highlight the disparity in the hype ratios, let’s compare XRP to its main competitors. XRP posted a Hype-to activity ratio of slightly above four (4.07) in this study. This is more than double the ratios of ETH and BTC which came at 1.72 and 1.17, respectively. That said, the report didn’t even capture more popular hashtags like #XRPCommunity, #XRPTheStandard, and #XRPArmy. Add this, and the ratio goes up to about 6.66.
In all fairness, XRP has a number of partnerships across the financial world. Therefore, some accounts legitimately promote these partnerships. This does not transcend to a coin like Bitcoin. After all, Ripple is in the business of rapid transactions for financial entities. This calls for constant hype to market its capabilities.
What’s Worrying About the High Ratios?
Aggressive marketing is fair game. However, there has to be a certain level of congruence between hype and sustained growth. In this study, the coin with the most hype was TokenPay with hype ratios that came in at a staggering 911.1. This is thousands of time more than Tether (USDT) which has $22 billion in daily trade volumes.
Similarly, the high hype-to-activity ratio for XRP does not necessarily indicate that it will rise exponentially in the short-term. This kind of aggressive promotion makes a lot of sense in the initial months of a cryptocurrency launch. However, soon as the coin is fully up to speed the hype ratio should really take a life of its own.
Therefore, without accusing Ripple executives of malicious intent, this is not a good look. The fact that XRP gets mentions that don’t match up to actual investor enthusiasm is worrying. XRP prices declining through a large part of the past three months does no justice to this finding. This is because XRP prices peaked at around $0.50 around June 2019 only to decline to less than $0.27 at the time of writing.
Is XRP being oversold? At the moment it certainly looks that this is true. Bitcoin has been on resurgence through most of 2019 but somehow altcoins like XRP have continued to stutter. Accordingly, the high tweet volume may, on the one hand, indicate a vibrant coin community but there has to be a correspondence in substance. It will be interesting to see how XRP will pan out moving forward.