Former Ripple CTO Draws a Sharp Line Between Investing and Gambling
Former Ripple CTO David Schwartz challenged the favored declare that inventory markets and prediction markets are simply casinos, arguing on X that the comparability ignores a elementary financial divide.
Schwartz stepped again from each day operations at Ripple on the finish of 2025 and turned CTO Emeritus. He entered the talk on June 17, 2026, responding to customers who argued that “buying and selling” is a euphemism for playing.
Gambling Moves Value, and Investing Grows It
The alternate started when X customers argued that prediction markets and inventory markets function like casinos. Their core declare was that “buying and selling” serves as a polished cowl for putting bets. Schwartz rejected that framing.
He separated the 2 by their financial operate. Gambling strikes current worth between individuals. Investing generates new worth.
“A key option to see the distinction is that this: If you could have constructive anticipated worth in playing, one thing has gone very improper. If you could have unfavorable anticipated worth in investing, one thing has gone very improper,” says Schwartz
The logic works symmetrically. A gambler who constantly beats the home reveals a flaw within the system, not a function. An investor who constantly loses in a functioning market faces a downside with their strategy or the market itself. That take a look at shifts the burden of proof onto the system’s design.
A on line casino’s function is to redistribute cash amongst gamers. A market’s function is to direct capital towards productive use and generate returns throughout the broader financial system over time.
Schwartz’s Long View on Markets
The remarks carry added weight from somebody who co-architected the XRP Ledger. Schwartz served as Ripple’s CTO for greater than a decade earlier than transitioning to an advisory board function on the finish of 2025. He stays one of the crucial outstanding technical voices within the XRP ecosystem.
The Ripple EX CTO additionally drew vital consideration earlier this 12 months for his XRP escrow price views, straight difficult viral value targets. He used market-cap math to point out that many group projections relaxation on valuations exceeding your entire world cash provide.
XRP (XRP) trades at $1.19 on the time of writing, down 3.64% over the previous 24 hours. The asset holds a top-six market rank with complete capitalization close to $74.2 billion.
The feedback additionally land as prediction markets face state bans throughout the US. At least 12 states have moved to categorise occasion contract platforms as playing underneath state regulation.
Whether policymakers undertake Schwartz’s value-creation framing or the on line casino label favored by his critics might form how these markets are regulated within the months forward.
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