Connect with us

Blockchain news

Ripple Releases One Billion Tokens from Escrow Again, Does This Influence XRP’s Price Movement?

Ripple released a total of 1 billion XRP from its Ripple escrow account in two separate transactions of 500 million tokens each. Will XRP price plummet?…

Published

on

At the beginning of the month, Ripple released once again a total of 1 billion XRP from its Ripple escrow account in two separate transactions of 500 million XRP tokens each.

How does Ripple’s XRP escrow account work?

The move follows a practice Ripple has been keeping up since 2017, where escrow releases are carefully scheduled cryptographically for the beginning of each month, as the blockchain firm intends to release a total of 55 billion XRP tokens. The strategy is to promote the Ripple ecosystem, help startups, retain XRP usage consistent, and investors’ attention in Ripple operations.

Typically, Ripple Labs unlocks the tokens in two separate transactions of 500 million XRP each. The latest one, released on December 1, were both estimated at a value of approximately $330 million each.

Why Ripple’s escrow release may not hinder XRP

With the planned escrow release happening monthly, there have been concerns by investors that Ripple dumping XRP into the market will crash the token price, and negatively impact it. As the release of tokens from the escrow account will provide more XRP liquidity in the cryptocurrency market, this may serve to drive down the price of the token, as there is an increased supply to alleviate the demand.

Additionally, there have been rumors that Ripple Labs would be benefitting from the sell-off. However, this was previously refuted by Daniel Schwartz, the Chief Technology Officer at Ripple, as he explained that the blockchain company’s sell-offs were “negligible” given the firm’s total assets. Currently, Ripple Labs is estimated to be worth around $10 billion and reputed to be the fourth biggest fintech firm globally, according to data from CB Insights.

Despite fears that the mass release of XRP tokens from Ripple’s escrow account will result in the altcoin plummeting on the market, this has not been what has been happening. Previously, the release of one billion tokens at the beginning of the month has not triggered a market upset of XRP that has drastically pushed its price lower, so why should it now?

In fact, it appears that Ripple’s XRP may be more correlated with other altcoins and Bitcoin (BTC)’s movements, rather than Ripple’s move to release tokens periodically into the market.

Following the unlocking of one billion XRP tokens on December 1, the altcoin did not perform worse than it normally did. It did however pull back slightly in price, in tandem with Bitcoin’s price movement, but the decrease in price has not been alarming. Per market experts, a pullback is normal following a massive surge, which XRP has certainly recorded last month, gaining more than 130%.

Currently, the altcoin is up 25% on CoinMarketCap in the past seven days.

Factors influencing Ripple XRP’s market performance

Along with Bitcoin’s surges these past few weeks, XRP has rallied bullishly and recorded significant gains of its own. Last week, when BTC dipped momentarily, XRP also traded lower, following the mainstream cryptocurrency’s movements.

Not only does Bitcoin play a part in XRP’s price fluctuations, but other factors may serve to influence the token’s price, namely the rise in investor interest in Ripple and the blockchain firm’s active efforts to expand its clientele base.

A recent event that has also benefitted the altcoin positively is Ripple’s smart contract fork Flare Network’s announcement of its upcoming Spark token airdrop, which can be received freely by XRP holders on a 1:1 ratio through participating digital wallets and cryptocurrency exchanges.

In addition to this, Ripple has announced new projects and partnerships this year. As its XRP serves as a payments solution for cross-border transactions, dubbed a “bridge currency” by the fintech firm, Ripple’s growth is sure to escalate, dragging up the value of its token along with its success.

Image source: Shutterstock

Why Ripple’s escrow release may not hinder XRP

Source: https://blockchain.news/analysis/ripple-releases-one-billion-tokens-escrow-again-does-this-influence-xrp-price-movement

ripple-releases-one-billion-tokens-from-escrow-again,-does-this-influence-xrp's-price-movement?

Title

Reuters18 hours ago

Eco-friendly sneaker maker Allbirds aims for $2 bln valuation in U.S. IPO

Eco-friendly sneaker maker Allbirds Inc said on Monday it aims to be valued at over $2 billion in its New...

ZDNET2 days ago

Comcast gave me good, precise news. The truth was precisely the opposite

Many companies believe that technology is perfect for customer service communication. Often, though, it just isn't.

Bioengineer5 days ago

Sex differences in COVID-19 outcomes

Credit: Mary Ann Liebert, Inc., publishers In a study of more than 10,600 adult patients hospitalized with COVID-19, women had

Techcrunch6 days ago

Resistant AI scores $16.6M for its anti-fraud fintech tools – TechCrunch

Resistant AI, which uses artificial intelligence to help financial services companies combat fraud and financial crime — selling tools to...

Techcrunch6 days ago

Facebook reportedly plans to change its name to focus on the metaverse – TechCrunch

Facebook is planning to rebrand the company with a new name to focus on building the metaverse, according to a...

Bioengineer1 week ago

UTHSC awarded $1.5 million HRSA grant for sexual assault nurse examiner training

Credit: UTHSC Memphis, Tenn. (June 16, 2021) - The University of Tennessee Health Science Center's College of Nursing has received

Techcrunch1 week ago

Does the NFT craze actually matter? – TechCrunch

Hello friends, and welcome back to Week in Review! Last week, we talked about Apple’s subscription addiction. This week, I’m...

CNBC2 weeks ago

Earnings

Corporate Company Earnings, Find Earnings Per Share and Earnings History Online

ZDNET2 weeks ago

Even computer experts think ending human oversight of AI is a very bad idea

The UK government is thinking of scrapping the right to ask for a human to review decisions made entirely by...

Crunchbase2 weeks ago

The Briefing: Hailo Lands $136M Series C

Crunchbase News' top picks of the news to stay current in the VC and startup world.

Review

    Select language

    Trending