As reported by Finbold, Ripple Labs, the company behind the development of XRP Ledger (XRP) sold 150 million XRP tokens from its June reserves on Friday at an average price of $0.52. The transaction amounts to $78 million, which accounts for 0.25% of XRP’s $29.25 billion market capitalization at a rate of $0.52 per token.
Ripple’s Transaction Raises Eyebrows
On June 1, Ripple let go of 1 billion XRP from the initial distribution, securing them in monthly escrows until 2027. Following that, Ripple moved 200 million XRP to its treasury account and secured the remaining 800 million in new escrow wallets.
This happened after a staggering 31 million XRP tokens were sent to Bitstamp, a prominent cryptocurrency exchange that sparked sell-off fears within the cryptocurrency community at the time. Furthermore, the ‘Ripple (35)’ account sent an additional 200 million tokens to the sell-off reserves, bringing the total to 400 million XRP.
This unorthodox action has raised worries about a possible price effect, as past events have demonstrated that Ripple’s escrow actions can affect the XRP price.
Just like before, the selling activity occurred when the treasury account, known as ‘Ripple (1),’ transferred tokens to the unnamed account ‘rP4X2hTa.’
This move leads to XRP supply inflation by introducing tokens that have never been in circulation before into the market for the first time. Ripple’s actions have been heightened by rumors that the company might be gearing up for its most substantial monthly XRP sell-off since 2017.
XRP Token Sell-Off Impact On XRP
It is interesting to see how Ripple’s sales impact XRP’s price by increasing supply pressure. Historically, XRP often drops when Ripple makes its unscheduled token selloffs. Crypto analyst Coach K. mentioned in an X post that supply shock has caused XRP to dip.
SUPPLY SHOCK CAUSES $XRP TO DIP
According to Finbold, Ripple sold 150 million XRP on June 7, pressuring XRP prices.
The sale totaled about $78 million, equivalent to 0.25% of XRP’s $29.25 billion market value.
On June 1, Ripple released 1 billion XRP from its initial…
— Coach K Crypto (@Coachkcrypto) June 7, 2024
Despite being the top XRP supplier, Coin Metrics removed XRP from the CMBI 10 Index in 2021 due to concerns about its investability amidst the SEC’s lawsuit against Ripple Labs. However, the digital asset has been reinstated.
XRP price has shown price resilience in the past. Riding on this, experts anticipate that due to its expanding utility, it could potentially surpass $10,000 in the near future.
At press time, XRP’s price is at $0.494205, down by 5.70% in the last 24 hours according to CoinMarketCap’s data.
Disclaimer: The information provided in this article is for informational purposes only. It does not constitute investment, financial, trading, or any other sort of advice. You should not treat any of Crypto-Vanguard’s content as such. Crypto-Vanguard does not recommend that any cryptocurrency should be bought, sold, or held by you. Do your due diligence and consult your financial advisor before making any investment decisions.