Sun June 2, 2024 ▪
3
min reading ▪ acc
In a move that could deeply shake up the crypto market, Ripple plans to sell 400 million XRP during the month of June, completing the largest token sale in seven years. The decision, which comes amid heightened volatility, is drawing strong reactions from investors and observers. Why did Ripple choose this time to do this massive selloff and what will be the consequences?
Historical cryptocurrency sell-off
On June 1st, Ripple unlocked one billion XRP worth $520 million through the XRP Ledger escrow system. Ripple usually transfers 200 million tokens to its treasury every month, but this time a dormant account known as “Ripple (35)” added another 200 million XRP to “Ripple (1)”. Which suggests even bigger sales this month.
Since the introduction of escrow in 2017, Ripple has permanently reserved up to 350 million XRP for monthly sales. In 2024, monthly sales were between 200 and 260 million XRP. If Ripple goes ahead with its planned sale of 400 million XRP this month, it would be the largest sale in seven years, which could send shockwaves through the crypto market. Transactions are verifiable on the blockchain using XRP Scan, providing full transparency of the company’s funds movement.
The motivation behind the XRP sell-off
David Schwartz, CTO of Ripple, explained the reasons for this massive sales strategy. According to him, Ripple holds a significant amount of XRP and regularly selling these assets is the only viable alternative to avoid holding them indefinitely. This approach allows Ripple to fund its current operations, support the development of its ecosystem, and stabilize the crypto market by avoiding a brutal devaluation of XRP.
Ripple currently holds 4.8 billion XRP in wallet and 40.1 billion in escrow, which is released gradually every month for 42 months. This managed issuance strategy aims to build trust among investors by ensuring increased transparency of XRP sales. Despite these measures, Ripple’s continued sales of XRP raise questions about their long-term impact on the cryptocurrency’s value and users’ perception of its utility.
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A graduate of Sciences Po Toulouse and holder of the blockchain consultant certification issued by Alyra, I joined the Cointribune adventure in 2019. Convinced of the potential of blockchain to transform many sectors of the economy, I made a commitment to raise awareness and inform the general public about this ever-evolving ecosystem. My goal is to enable everyone to better understand blockchain and take advantage of the opportunities it offers. Every day I try to provide an objective analysis of current events, decipher market trends, convey the latest technological innovations and put into perspective the economic and social problems of this ongoing revolution.
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The comments and opinions expressed in this article are solely those of the author and should not be considered investment advice. Before making any investment decision, do your own research.