The payments token XRP, associated with Ripple, and the smart-contract platform needs to prove its true utility as the cryptocurrency sector shifts from narrative-driven hype to fundamental value, Galaxy Digital’s founder and CEO, Mike Novogratz, mentioned in a recent interview.
“Is Ripple capable of maintaining its position? Will Cardano manage to hold up?” Novogratz asked during a discussion with Galaxy’s Head of Research, Alex Thorn, on Friday.
He pointed out that while XRP and Cardano’s token, ADA, have loyal supporters, their on-chain activity is notably lacking.
“Charles Hoskinson, bless his heart, has kept the Cardano community engaged with a blockchain that sees limited use,” Novogratz commented. “He’s nurtured a strong community similar to that of XRP. But can you maintain this as more options arise?”
According to Novogratz, the overall market is changing: Tokens that aren’t utilized as “money,” like Bitcoin, will be assessed like traditional enterprises based on parameters like revenue, usage, and quantifiable value.
Ripple employs the XRP token as a bridge asset for swift, inexpensive cross-border transactions through its RippleNet network, collaborating with various banks and fintech organizations. Nonetheless, critics have consistently highlighted the low organic activity, questioning whether it justifies XRP’s substantial market value.
Currently, XRP’s market capitalization is around $115 billion, making it the fifth-largest cryptocurrency, as per CoinMarketCap data. In contrast, Cardano’s ADA is valued at roughly $13-14 billion, placing it in the vicinity of the 12th position.
On-chain data reinforce Novogratz’s concerns about user adoption. At the moment, the number of active XRP addresses stands at 16,703, based on information from CryptoQuant.
Meanwhile, Cardano’s active addresses totaled over 19,000. These figures are significantly lower than other projects like Solana, which usually registers millions of active addresses bolstered by DeFi, memes, and applications. Solana’s SOL token has a market valuation of $72 billion, making it the seventh-largest globally.
Novogratz contrasted these community-centric tokens with rising platforms like Hyperliquid, a decentralized perpetuals exchange that genuinely generates revenue and reinvests most profits into buying back its token, thereby fostering equity-like economics.
