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Ripple Dumps 150M XRP as Market Fear Rises

On-chain data suggests that Ripple will likely offload up to 400 million XRP tokens this month.

Ripple XRP

Payment-focused blockchain firm Ripple has sold 150 million XRP tokens (worth approximately $78 million) to increase its circulating supply. There remain concerns that the company may sell more XRP tokens, potentially dragging down the asset’s price.

Ripple Sells 150M XRP

Ripple adopts an inflationary mechanism for the XRP cryptocurrency. This entails that XRP’s circulating supply increases over time. This model, which encourages spending and discourages hoarding, enables Ripple to prove true to its stance about XRP being a payment cryptocurrency for frequent transactions.

XRP has a total supply of 100 billion and a circulating supply of over 55.5 billion. Ripple introduced the escrow policy to enable the release of more XRP tokens into the circulating supply. An explanation of the escrow model shows that 55 billion were locked up in escrow, subjected to a monthly unlock of 1 billion tokens for 55 months.

On June 1st, one billion tokens were rolled out from escrow into two Ripple-labelled wallets. Usually, Ripple sells 200 million of these tokens into the circulating supply and moves the remaining 800 million tokens to a new escrow. In this case, however, an additional 200 million XRP tokens were sent to the same wallet that sold the latest 150 million XRP tokens.

Impact on XRP’s Price

Ideally, a cryptocurrency’s price often reduces whenever there is a sudden selloff. If Ripple offloads this large tranche of tokens into the market, XRP’s value may subsequently drop. At the time of writing, XRP had a trading price of $0.526.

Source: CoinMarketCap

It is currently uncertain whether Ripple will sell the additional tokens. However, according to on-chain data from the blockchain explorer XRPScan, the wallet address holding the extra XRP tranche remains in the balance.

While striving to bolster its cryptocurrency’s value, Ripple finds itself in a years-long legal battle with the United States Securities and Exchange Commission (SEC). The tussle is based on the SEC’s argument that XRP is an unregistered security and must be registered with the agency before being issued to investors. 

Mishael Nwani

Mishael Nwani is an avid crypto enthusiast with nearly four years of experience in the industry. Since 2022, he has covered topics across cryptocurrencies, NFTs, artificial intelligence, and financial markets.