Source: Wit Olszweski
- Ripple has unlocked 1 billion XRPs from its escrow wallet – the tokens were released in two sets of 500 million according to Whale Alert.
- The tokens will boost exchanges’ liquidity, sent to Ripple customers and help fund Ripple’s operations.
Following a remarkable performance by XRP in April, Ripple begins the new month by offering new tokens to potential investors. In the last couple of hours, the company behind the fourth-ranked cryptocurrency has unlocked 1 billion tokens. These are set to be distributed to investors, with funds collected used to fund different projects within the ecosystem.
In the past Ripple has been criticized by investors for releasing huge amounts of the token into the market when prices are low. This has always saturated the market, with supply surpassing demand. But Ripple has always maintained that funds are key to ensure the project continues to grow and improve. Additionally, to quell the backlash, Ripple has bought back XRP to promote a healthy market.
Has this affected XRP price?
Although prices are currently stable – XRP up by over 30% in the last 7 days – the latest load of coins will send jitters to some investors. With the digital asset currently trading for around $1.55, if all tokens are sold, this will bring the project roughly $1.55 billion. However, not all tokens are spent and part of the load is usually locked back again.
The XRP community has in recent times understood that the released tokens do not have a direct impact on price. In the past, the narrative “Ripple is dumping XRP” has spread FUD and triggered a sell-off. In the last 24 hours, there has only been a subtle, less than 1%, price change.
XRP has in the last month shown a lot of resilience. After starting the month in the $0.55 range, the token more than doubled to reach a 3 year high of $1.95. Admittedly, this is still far from its ATH of $3.84.
Late last year there was a proposal by an XRP enthusiast after posing this question,
If nodes, validators and the community at large got together and we agree that it’s better for the community to burn the 50 billion XRP that Ripple has in escrow, would it be possible?
Ripple’s chief technology officer, David Schwartz, admitted that such a scenario was possible if the proposal got enough votes. He added that public blockchains are democratic and there was nothing Ripple could do to stop it. Although a long shot, if achieved, it would go a long way to promoting demand and pushing prices higher.
Hearing update
Yesterday, Ripple presented their case to Magistrate Judge Sarah Netburn in which they are accusing the SEC of unlawful action. Ripple caught the SEC sending MOUs to foreign entities. The SEC doubled down that it is asking for foreign regulators to get information from companies that have dealt with Ripple, something that the agency insists is voluntary.
Ripple first argued that the SEC began this process without informing them which they are supposed to. Secondly, that the SEC is gaining an unfair advantage with some foreign regulators having to abide by its “voluntary” request.
After hearing both arguments, Magistrate Judge Sarah Netburn has chosen to take a few days before making a ruling.
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