Ripple’s XRP Escrow Activity and Sell-Off in February
Ripple currently holds around 39.9 billion XRP in escrows, which is not part of the token’s circulating supply. On February 1, Ripple unlocked 1 billion XRP worth $500 million, keeping 20% of the total.
Every month, Ripple unlocks another 1 billion tokens, but usually retains only a fraction for its treasury and sells the rest on the market. This pattern has an impact on the long-term value of the asset.
In February, Ripple held back 200 million XRP, consistent with previous months. This amount is now valued at approximately $100 million, with each token priced at $0.50.
To prepare for this month’s selling activity, Ripple transferred the 200 million XRP from ‘Ripple (22)’ to ‘Ripple (1)’. Both accounts are controlled by the institution, with the former being the unlocked escrow address and the latter used as its liquid treasury.
Ripple’s Escrow Activity Details
Similar to previous months, escrows have reached finality within the ‘Ripple (22)’ and ‘Ripple (23)’ accounts.
‘Ripple (22)’ unlocked 500 million XRP on February 1 and sent 200 million to ‘Ripple (1)’, while sending 300 million to ‘Ripple (10)’. Interestingly, ‘Ripple (10)’ is currently used to re-lock XRP in new escrows. The 300 million will be released on July 1, 2027.
‘Ripple (23)’ sent the unlocked 500 million to ‘Ripple (11)’, which is fully locked in an escrow until June 1, 2027.
‘Ripple (22)’ and ‘Ripple (23)’ still hold 1 billion XRP tokens for escrows that will end next month, on March 1, 2024. After these unlocks, the market should pay attention to ‘Ripple (10)’ and ‘Ripple (11)’ in anticipation of the controller’s selling activity.
It is important to note that Ripple strategically liquidates their holdings at specific moments. These sell-offs have a significant impact on the token’s 24-hour trading volume and can influence short-term price action.
Recently, Ripple’s Co-founder and Executive Chairman, Chris Larsen, experienced a hack resulting in the loss of $112 million worth of XRP. The expectation of a sell-off due to this incident negatively affected the token’s price, with a similar value to this month’s reserves.
Hot Take: Ripple’s Ongoing Escrow Strategy
Ripple continues its monthly unlocks of XRP tokens from escrows, followed by strategic selling activities. This approach has implications for the long-term value of XRP and can affect short-term price movements. Investors should closely monitor Ripple’s escrow activity and consider its potential impact on the market. Additionally, recent events such as the hack experienced by Chris Larsen highlight the vulnerability of cryptocurrency assets and their potential influence on token prices. As Ripple maintains its escrow strategy, market participants should stay informed and adapt their investment strategies accordingly.
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