Ripple’s XRP Escrow Activity and the Impact on Long-Term Value
Ripple, the company behind the cryptocurrency XRP, has a significant amount of XRP locked in escrows. These tokens are not part of the circulating supply and are unlocked by Ripple on a monthly basis. The company retains a portion of the unlocked tokens for its treasury reserves and sells off the rest. This unlocking and selling activity can have an impact on the long-term value of XRP.
Ripple’s March Sell-Off
In March, Ripple unlocked 1 billion XRP, valued at $630 million. Of this amount, 200 million XRP was retained by Ripple for its treasury reserves, consistent with previous months. The remaining tokens were sold off.
To prepare for this month’s selling activity, Ripple transferred the 200 million XRP from one of its escrow addresses to its treasury reserves account.
Escrow Activity Details
The escrows within Ripple’s accounts ‘Ripple (22)’ and ‘Ripple (23)’ reached finality in March. These two addresses will no longer be used for future unlocks.
On March 1, ‘Ripple (22)’ unlocked 500 million XRP. Out of this amount, 200 million XRP was sent to Ripple’s treasury reserves account (‘Ripple (1)’), 200 million to another escrow account (‘Ripple (10)’), and 100 million to a new escrow account (‘Ripple (12)’). ‘Ripple (10)’ will unlock its 200 million XRP in July 2027, while ‘Ripple (12)’ will unlock its 100 million XRP in August 2027.
‘Ripple (23)’ also unlocked 500 million XRP, which was sent to another escrow account (‘Ripple (11)’). This account will remain locked until July 1, 2027.
What to Expect in April
In April, market observers should pay attention to the selling activity of ‘Ripple (10)’ and ‘Ripple (11)’. These accounts are likely to be involved in Ripple’s sell-offs.
Ripple strategically liquidates its holdings at opportune moments, which can have a significant impact on the token’s short-term price action. These sell-offs often make up a substantial portion of XRP’s 24-hour trading volume.
It is worth noting that Ripple has previously demonstrated its ability to sell additional amounts of XRP outside of the monthly unlocks. In February, the company sold an extra 100 million XRP from a dormant wallet it controls.
Hot Take: Ripple’s Sell-Off Strategy and Its Impact on XRP Value
Ripple’s regular unlocking and selling of XRP tokens can influence the long-term value of the cryptocurrency. By carefully timing their sell-offs and strategically liquidating their holdings, Ripple can create short-term price fluctuations and potentially affect investor sentiment. While these sell-offs may provide liquidity for the market, they also introduce a level of uncertainty as investors try to anticipate Ripple’s next moves. Market participants should closely monitor Ripple’s selling activity and consider its potential impact on the overall XRP market.
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