XRP
Dark pools are affecting $XRP prices negatively in the short-term but could be the catalyst for a moonshot in the long run, an expert said. IBTimes US

KEY POINTS

  • DAG's Claver said big players are utilizing 'dark pools' to stack up on crypto, including $XRP
  • Dark pools hide the momentum in massive buying, suppressing the price and sowing doubt among retailers
  • In the long term, dark pools are setting up the perfect scenario for a price pump, Claver said

XRP has made headlines in recent months amid massive developments around Ripple, the cryptocurrency's largest corporate holder. However, questions have lingered around the token's unmoved price, and for one expert, "dark pools" may be the reason.

Jake Claver, the managing director of digital investment firm Digital Ascension Group (DAG), on Monday suggested that dark pools are a double-edged sword that may be affecting the XRP coin's price movement.

Dark Pools Suppressing $XRP's Price?

Claver explained that dark pools are private spots where huge orders take place. Basically, dark pools fulfill massive orders off of main exchanges typically used by retail crypto investors.

He noted that "big players" utilize these pools to avoid pumping a crypto asset's price, setting off the popular FOMO (fear of missing out) trend in the crypto space.

For instance, institutions are currently stacking up on crypto assets, including XRP. However, institutions "need the privacy and efficiency dark pools over to do it properly."

In essence, the big players, including hedge funds and family offices – even nation states – load up on crypto but they're avoiding the attention of retail, which usually send prices on a skyrocketing motion too soon.

Within dark pools, all the buying pressure from large holders are hidden, and prices stay flat. This scenario is what could be happening to XRP at the moment, Claver said.

"XRP could be getting heavily suppressed right now with institutions quietly scooping up. Meanwhile, the chart looks boring, and retail traders lose patience and start selling," he wrote.

Dark Pools Set Up the Perfect Scenario for a Surge

While the short-term impact of dark pools may be devastating for retailers who begin doubting a token they've invested in, dark pools have the ability to "set up huge rewards for the ones willing to wait it out," Claver pointed out.

He said demand on public exchanges will explode past the supply, which will then trigger market panic and in turn, the affected token will reprice itself. At this point, XRP holders may see "a potential 2x, 3x, even a 5x sprint" in the token's price.

Once dark pools dry up their supply due to the big player hoarding, "buyers have no choice but to head to public exchanges," and this is when things will start moving vertically.

Claver went on to advise XRP holders and other crypto holders to avoid judging the health of a cryptocurrency based on public exchanges. "The big moves are happening behind the scenes," he said.

He expects the XRP token's price to have a more gigantic reaction once "the lid blows off" on dark pools. "For XRP specifically, the timing could be even crazier. Regulatory clarity and actual utility could hit right as supply locks up," he projected.

It remains to be seen whether XRP is on its way toward breaking the price dam, but for now, interest in the token is still high, especially with multiple XRP exchange-traded funds (ETFs) waiting for approval.

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