What Happened to the Unlocked 1 Billion XRP?
On October 1, Ripple unlocked 1 billion XRP tokens from its escrow system. However, the company immediately re-locked 800 million XRP (80%) in new contracts set to finalize by 2027. The remaining 200 million (20%) tokens are expected to be put into circulation soon, which could impact the price of XRP. Despite this, the considered circulating supply of XRP remains the same at 53.312 billion.
Ripple’s recently unlocked tokens are not considered circulating until they are spent or sold by the company. It has been reported that Ripple sells most of what is not re-locked each month. The release of the 200 million XRP will increase the current supply by 0.37% and result in a yearly supply inflation of around 4.44% if Ripple continues this pattern.
Where Did the Unlocked XRP Go?
The unlocked 1 billion XRP was sent to two wallet addresses controlled by Ripple: Ripple (22) and Ripple (23). From there, it was distributed to three other accounts owned by Ripple. Ripple (1) received 200 million XRP, which is still liquid and ready to be spent. Ripple (10) received 300 million XRP, with 200 million re-locked into an escrow set to be unlocked by March 2027 and 100 million re-locked into an escrow set to be unlocked by April 2027. Ripple (11) received 500 million XRP, all of which were re-locked into an escrow set to be unlocked by March 2027.
The transactions took place within a span of 18 hours, with no more than 20 minutes between each transaction.
Additionally, both Ripple (22) and Ripple (23) still hold 5 billion XRP tokens for monthly escrows that will be finalized in the next five months until February 29, 2024.
Will Ripple Follow the Same Spending Pattern?
In September, Ripple spent 100 million XRP amid a price crash. Another 75 million XRP were spent six days later, followed by the circulation of 50 million tokens on September 22. These spending patterns created extra selling pressure on the market, impacting XRP’s price. The market will closely watch Ripple’s spending in October to predict future impacts and trading opportunities.
The additional selling pressure from the increased supply may require a higher demand for XRP to prevent significant price drops. However, even the expectation of a sell-off could lead investors to try to front-run Ripple.
Hot Take: Ripple’s Unlocked XRP Raises Concerns About Price Impact
The recent unlocking of 1 billion XRP by Ripple has raised concerns about its potential impact on the digital asset’s price. While the company re-locked a majority of the tokens, the release of the remaining 200 million XRP into circulation could affect market dynamics. This increase in supply may create additional selling pressure and necessitate higher demand to maintain price stability. Investors and traders will closely monitor Ripple’s spending patterns to anticipate any potential market disruptions and capitalize on trading opportunities. As Ripple continues to unlock and distribute its XRP holdings, it remains to be seen how this will impact the overall value and perception of the cryptocurrency.
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