Ripple Returns 800 Million XRP To Escrow
Ripple Labs has recently moved 800 million XRP tokens back into its escrow system. This action follows the company’s monthly unlocking of one billion XRP, which began in 2017 to ensure price stability for the cryptocurrency.
The purpose of Ripple’s escrow mechanism is to provide a consistent and predictable distribution of XRP to the market. By returning a majority of the tokens (usually 800 million XRP) back into escrow each month, Ripple prevents sudden influxes of tokens that could cause price volatility. The remaining portion (around 200 million XRP) is kept for circulation in the market.
Details of the Return
According to data from Whale Alert, the return of the 800 million XRP tokens occurred in two transactions, with each involving 400 million XRP. The first set was directed back into escrow from an address called ‘Ripple 10,’ which had received the tokens from two other addresses: Ripple 22 and Ripple 23. The second batch was transacted from ‘Ripple 23’ to another address named ‘Ripple 11’ before being sent to the company’s escrow account.
The market value of the re-locked 800 million XRP was approximately $480 million at the time of these transactions.
Remaining XRP and Escrow Holdings
Out of the original one billion XRP made available, the remaining 200 million XRP (valued at about $121 million) was moved from Ripple 22 to Ripple 1. This balance is expected to cover Ripple’s operational expenses and other business activities.
Ripple currently holds around 40.9 billion XRP in escrow, slightly less than their Q3 report’s disclosed figure of 41.3 billion XRP at the end of September.
XRP Price Outlook
After breaking the 200-day Exponential Moving Average (EMA) line on October 21, the XRP price has been on an upward trend. Within 11 days, it increased by nearly 20%. The recent pause in its rally is likely not due to Ripple’s monthly transfer from escrow, as the tokens do not immediately enter the market and investors are aware of this process.
The price encountered strong resistance at the $0.625 level, marked by the 0.386 Fibonacci retracement level. However, if it remains above $0.60, there could be another attempt to break through this resistance. If successful, the next short-term target could be the 0.5 Fibonacci retracement level at $0.683. On the other hand, if rejected again at $0.625, a retest of the 0.236 Fibonacci retracement level at $0.553 may be expected.
Hot Take: XRP Escrow Moves Indicate Ripple’s Long-Term Vision
Ripple’s consistent practice of returning a majority of XRP tokens back into escrow demonstrates its commitment to maintaining price stability and avoiding sudden volatility in the market. By gradually releasing XRP through monthly tranches and retaining a portion for circulation, Ripple aims to create a predictable distribution pattern.
This approach aligns with Ripple’s long-term vision for XRP as a reliable digital asset that can facilitate efficient cross-border transactions and bridge traditional financial systems with blockchain technology.
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