XRP Community Signals Relevance, Says Novogratz

What to Know:

• Mike Novogratz highlights community strength as key to crypto longevity, citing XRP and Cardano.
• This perspective contrasts with his earlier criticisms, influenced by centralization concerns and legal battles.
• The shift matters because institutional investors are increasingly valuing community resilience alongside technical merits.

Galaxy Digital’s Mike Novogratz has shifted his perspective on XRP and Cardano, emphasizing the importance of community support for long-term survival in the crypto market. Once critical of both projects, Novogratz now acknowledges the resilience of their communities as a significant factor in their staying power. This recognition comes as institutional investors are placing greater emphasis on community engagement as a key indicator of a digital asset’s viability.

Community Strength Keeps XRP Relevant

Novogratz specifically cited XRP as a prime example of a cryptocurrency that has maintained its prominence through multiple market cycles due to its dedicated community. He noted that the XRP community’s unwavering support, even during prolonged downturns and regulatory challenges, has been instrumental in the token’s continued relevance. This contrasts with many newer projects that often rely on hype and short-term gains to attract attention.

1/ I’ve been thinking a lot about communities in web3. Some have staying power and others don’t. The ones that stick tend to have leaders who are authentic and don’t give up. $ada and $xrp are two that come to mind. Both communities have stuck with it through thick and thin.

— Mike Novogratz (@novogratz) August 9, 2023

Earlier Criticism Rooted in Centralization Concerns

Novogratz’s current stance is a notable departure from his previous criticisms of XRP. He had long expressed concerns about the token’s centralization, particularly Ripple’s significant control over the XRP supply. As a vocal proponent of Bitcoin and Ethereum, he often questioned the rationale behind XRP rallies and the understanding of retail investors who supported the token. The SEC’s lawsuit against Ripple in December 2020 further fueled his skepticism, leading him to distance himself from the project.

Legal Battle Prompts Reassessment

Despite XRP’s price surge during the 2021 bull market, Novogratz maintained his critical view. However, Ripple’s subsequent legal victories against the SEC prompted a reassessment. In later podcast appearances, Novogratz admitted that he had underestimated the resilience of the XRP community and the leadership of Ripple CEO Brad Garlinghouse. He acknowledged that the community’s unwavering support throughout the legal battle reflected genuine conviction rather than mere speculation.

A Similar Shift in View on Cardano

Novogratz has also extended his reassessment to Cardano, another cryptocurrency he had previously criticized. While he once mocked the project’s following, he now recognizes the role of IOG founder Charles Hoskinson in maintaining community cohesion. He views this ability to sustain long-term engagement as increasingly valuable in today’s fragmented crypto ecosystem. This shift suggests a broader recognition of the importance of community-driven initiatives in the digital asset space.

Implications for Institutional Investors

Novogratz’s evolving perspective highlights a broader trend in the crypto market: the growing importance of community engagement as a factor in investment decisions. Institutional investors, in particular, are increasingly looking beyond technical specifications and market capitalization to assess the strength and commitment of a project’s community. A strong community can provide a buffer against market volatility, attract developers, and foster long-term growth. As the crypto market matures, community resilience may become an increasingly important indicator of a digital asset’s long-term viability.

Related: XRP Bet Fails as 2025 Target Nears

Source: Original article