A Cautionary Tale Against FOMO Ahead of Ripple's RLUSD Stablecoin Launch
The launch of Ripple’s RLUSD stablecoin has raised warnings against “FOMO,” as the initial supply shortage could cause a temporary price spike before stabilizing around $1.
Ripple Chief Technology Officer David Schwartz has issued a measured warning about early price volatility for its US dollar-backed stablecoin, RLUSD, as it prepares to launch. In a post on social media platform X on Sunday, Schwartz explained that early adopters could face unusual price volatility due to supply shortages. He shared:
When RLUSD launches, there may be a supply shortage in the early days before the market stabilizes. There are actually people willing to pay $1,200/RLUSD for a fraction of one RLUSD.
However, Schwartz stressed that this volatility will not last long. But rest assured, the price will return very close to $1 as soon as the supply stabilizes. If not, something is very wrong.
Ripple is scheduled to launch RLUSD on December 17. The stablecoin will initially be available on platforms including Uphold, Bitso, Moonpay, Archax, and Coinmena, with plans to expand to exchanges like Bullish, Bitstamp, Mercado Bitcoin, Independent Reserve, and Zero Hash in the near future. Each RLUSD token is fully backed by US dollar deposits, US government bonds, and cash equivalents, ensuring its stability. Transparency will be maintained through monthly third-party audits conducted by an independent audit firm.
Additionally, Ripple has brought on former central bankers Raghuram Rajan and Kenneth Montgomery to its advisory board to provide strategic guidance on financial and regulatory issues. The launch is expected to increase liquidity in the XRP ecosystem, potentially leading to a price surge for XRP.
Addressing the speculative activity, Schwartz urged caution for those hoping to profit from RLUSD during its launch phase. “If you want to spend a lot of money to get a little RLUSD before everyone else, you can. But please don’t expect the price to stay above $1 once things stabilize, which I expect will happen very quickly,” he said. He reiterated the stablecoin’s fundamental purpose, advising users to adjust their expectations. He warned against acting on fear of missing out (FOMO), stating:
Please don't FOMO especially with stablecoins! This is not an opportunity to get rich.
Schwartz explained that temporary price fluctuations caused by supply and demand imbalances should be quickly corrected as market mechanisms take over. [Source: bitcoin.com]
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