The XRP Ledger’s (XRPL) upcoming integration of automated market maker (AMM) functionality has sparked debate within the XRP community. While some enthusiasts anticipate a positive price impact, a prominent community figure, Mr. Huber (@Leerzeit), has expressed concerns about impending doom for the already battered cryptocurrency.
A Potential XRP Price Drop
Mr. Huber, a respected XRP community figure and blockchain sleuth, advises XRP holders to cautiously approach the AMM launch, citing the price performance of XRP’s close competitor, Stellar (XLM). Following the launch of XLM’s AMM functionality in late 2021, XLM’s value experienced a significant decline, exceeding 80%.
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XLM was trading at $0.3661 on November 2, 2021. While a brief surge to $0.3915 occurred a week after the AMM launch, a sustained downtrend followed, with XLM reaching as low as $0.098 a year later. Mr. Huber suggests a similar scenario for XRP, potentially reaching the $0.10 to $0.11 range.
This translates to a potential price collapse of approximately 83% for XRP from its current price of $0.5828. Recall that Ripple CTO David Schwartz recently commented on the AMM’s potential Impact on XRP volatility, but Mr. Huber’s comments pose an intriguing point of conversation.
Just to mentally prepare the XRPCommunity. Stellar dropped more than 80% after the AMM went live. It litteraly marked the top. https://t.co/qjHnUOQlNj pic.twitter.com/pA2tH0kc2k
— Mr. Huber🔥🦅🔥 (@Leerzeit) March 17, 2024
Dissenting Opinions from the Community
Mr. Huber’s prediction has divided the XRP community. Dark Defender (@DefendDark), a notable crypto analyst, challenged this outlook, arguing that XRP has demonstrated resilience in the past.
The analyst believes XRP does not follow the news. He drew attention to XRP’s trends following good news, bad news, and no news, suggesting an absence of news-driven volatility for XRP.
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— TimesTabloid (@TimesTabloid1) July 15, 2023
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The Real Reason for XLM’s Price Drop
It’s crucial to consider the broader market context surrounding XLM’s price decline. XLM’s AMM launch coincided with the peak of the 2021 bull market, followed by a general market downturn. This suggests that the overall bearish sentiment might have played a more significant role in XLM’s price drop.
Several commentators highlight this point, contesting Mr. Huber’s prediction of an 82% plunge for XRP. In response, Mr. Huber acknowledges the current bullish trend but expresses concern about XRP’s current level being the peak and the AMM causing a year-long bear market for the digital asset.
Potential Impact of the AMM
While the specific impact of the XRPL AMM on XRP’s price remains uncertain, its core function revolves around facilitating decentralized trading. The public launch of the XRPL AMM is scheduled for March 22, with users highly anticipating its passive income opportunities.
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