Ripple Reserves 470 Million XRP for Sale, Marking Largest Monthly Dump in 7 Years

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As a researcher with years of experience in the cryptocurrency market, I find Ripple’s latest move to reserve 470 million XRP for sale quite intriguing and potentially concerning. This is by far the largest monthly offload since 2017, which raises questions about XRP’s market stability and Ripple’s financial needs.

As a researcher exploring the dynamic world of cryptocurrencies, I’ve noticed an unusual deviation from Ripple‘s traditional escrow model. They have decided to reserve approximately 470 million XRP tokens for sale, marking the largest monthly release in seven years. This action has sparked apprehensions about the potential impact on XRP’s market stability.

As an analyst, I find myself expressing concern about Ripple’s recent decision to set aside a substantial amount of XRP, specifically 470 million units, for future sales. This move represents the largest monthly release of XRP since 2017, raising eyebrows in the crypto community.

Ripple Doubles its Reserve Volume

This week, Ripple, the main developer of the XRP Ledger and the largest XRP owner, released a billion XRP tokens from its holdings. Typically, Ripple releases a billion tokens every month, keeping some for sale to finance its operations – usually 200 million tokens. However, on November 1, Ripple deviated from this pattern by increasing its total reserve to 470 million, which is its largest monthly sell-off in seven years. This move has caught the attention of investors due to ongoing legal disputes surrounding Ripple, as the increased selling could negatively impact XRP’s price. The increase in the reserve comes just before the US Presidential election, making investors more apprehensive since political influences might affect XRP’s future value.

Ripple’s XRP Escrow

Since 2017, Ripple has utilized an organized system to manage the distribution of XRP, preventing excessive market flooding. This method, called escrow, works by liberating a billion XRP, re-securing a portion, and setting aside some for transactions. When Ripple started this practice, it secured 55 billion XRP (about 55% of the total amount) into multiple escrows designed to be gradually released over a period of 55 months. These escrows are part of the ledger itself, and the ledger’s mechanics, backed by consensus, regulate the monthly release of XRP.

16% of the 1 billion XRP released monthly are set aside for sale to cover operating expenses, while the rest are locked away in long-term escrow. The unusually large 470 million XRP reserve for November indicates increased financial demands and potentially hints at a significant liquidity event that might occur in the future.

Escrow Recaps

In November 2024, Ripple’s XRP sales were larger than the amount sold in June. Back in June, Ripple offloaded 400 million XRP, with an initial 200 million kept in reserve and another 200 million moved from their idle account. The massive sale led to a significant drop in XRP’s value, approximately 20% within a week. If Ripple sells more XRP in November, it could amplify negative effects on the market if investors interpret this as a diminished faith in XRP’s future or Ripple yielding to the SEC’s ongoing legal battles.

In September and July, we sold a total of 350 million XRP and 300 million XRP respectively. However, as per our regular practice, we kept a reserve of approximately 200 million XRP each month. This was further bolstered by XRP from idle accounts throughout the month.

As a crypto investor, I’ve noticed that Ripple has offloaded an impressive 2.5 billion XRP in 2024 alone, with the greatest portions sold in June, July, and September. However, what really caught my attention is this month’s allocation of 470 million XRP, which was drawn directly from their reserve and released all at once. This sudden influx, combined with the increased quantity, could potentially have a significant and swift effect on the market. If Ripple continues to sell aggressively, there’s a risk that the XRP price might dip if the demand isn’t sufficient to counterbalance the increased supply.

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2024-11-03 17:01