The XRP price has already been under pressure for the past month, as the future outlook of Ripple is still set to be determined in the near future. Although XRP has moved up with the rest of the crypto market over the past few days of green, there is still uncertainty about the next bull run.
However, this little price movement could be brief, as the number of XRP tokens in circulation just increased by 1 billion XRP, around 1.87% of the circulating supply of 53.312 billion tokens.
Potential Impact On XRP Price And Supply
On-chain data from Whale_Alerts has shown bouts of XRP totaling 1 billion have been unlocked from escrow in three transactions from two separate wallets. First, 400 million XRP tokens worth over $205.9 million were unlocked.
🔓 🔓 🔓 🔓 🔓 🔓 🔓 🔓 🔓 400,000,000 #XRP (205,914,675 USD) unlocked from escrow at #Ripplehttps://t.co/V54DFtoI16
— Whale Alert (@whale_alert) October 1, 2023
In the second transaction, 100 million XRP tokens worth $51.4 million were unlocked.
🔓 🔓 🔓 100,000,000 #XRP (51,478,668 USD) unlocked from escrow at #Ripplehttps://t.co/P8BgPU21Hr
— Whale Alert (@whale_alert) October 1, 2023
And in the last transaction, Ripple unlocked 500 million XRP tokens worth $257.3 million. With the current market price of XRP at $0.5177, this puts the value of the unlocked tokens over $514.6 million.Â
🔓 🔓 🔓 🔓 🔓 🔓 🔓 🔓 🔓 🔓 500,000,000 #XRP (257,393,344 USD) unlocked from escrow at #Ripplehttps://t.co/1lSZdeqcMS
— Whale Alert (@whale_alert) October 1, 2023
Ripple’s latest unlock is part of the periodic release in its plan to release 55 billion XRP tokens over 55 months. Since 2017, the payment company has been known to release 1 billion XRP tokens each month through a smart contract. While Ripple claims this helps increase liquidity and utility, it also means a major influx of new coins entering circulation.
With more XRP available, the price often drops as supply outweighs demand. Each new release adds downward pressure, and the price frequently falls in the days leading up to and following the escrow unlocking.Â
SOL market cap currently at $9.5 billion on the weekend chart: TradingView.com
The monthly escrow has led to significant price slumps in the past months, especially during periods of lower interest in XRP. In particular, XRP witnessed a major selloff in June as whales dumped around 120 million XRP after Ripple unlocked its escrow.Â
Ripple has been known to periodically relock a portion of released tokens into the escrow system to reduce selling pressure, which helps extend the runway for the remaining tokens to be unlocked. For instance, Ripple immediately relocked 800 million (80%) of September’s token unlock. The total amount to be locked back in escrow this month is yet to be determined.Â
Ripple: The Future Outlook For XRP
XRP is currently up by 1.83% in a seven-day timeframe but the price outlook looks remains highly uncertain in the short term. Various predictions have come in for the token’s future, with one prediction even going as high as $10,000.Â
(This site’s content should not be construed as investment advice. Investing involves risk. When you invest, your capital is subject to risk).
Featured image from iStock
Credit: Source link
