Fears of Drop Grow as $230m In XRP Unlocked From Ripple’s Escrow
While XRP has already performed fairly poorly over the past seven days, some have begun to fear the cryptocurrency’s prospects are worsening with news that $230 million worth of XRP was unlocked from Ripple’s escrow wallet. For instance, BlockTV crypto analyst Joe Saz wrote:
“Either way it’s bad. They send back to escrow to maintain control of the bags or they dump them.”
But is this really the case?
$230 Million Worth of XRP Unlocked for Ripple
Once a month, one billion XRP coins get unlocked from Ripple’s escrow wallet, which ensures that the company’s large stash of the cryptocurrency (over one-third of the total supply of the asset) does not get depleted too fast.
Just ten hours ago, the latest one billion coins were unlocked from Ripple’s escrow. (Below is one transaction of two.)
🔓 🔓 🔓 🔓 🔓 🔓 🔓 🔓 🔓 🔓 500,000,000 #XRP (115,933,402 USD) unlocked from escrow at Ripple Escrow wallet
— Whale Alert (@whale_alert) March 1, 2020
While some fear that this will result in a deeper correction for XRP, which is trading at $0.232 as of the time of writing this after peaking at $0.345 last month, this may not be the case.
Speaking to CNN in September, Ripple’s chief executive Brad Garlinghouse affirmed to viewers that his company does not have an extreme sway over the market price of the cryptocurrency they so often use, XRP. Garlinghouse elaborated that it isn’t in his company’s interest to suppress the price of XRP and that even if they could, they couldn’t actively control the markets.
As to why the sales of the cryptocurrency are taking place, the industry executive explained that the fund received from the sales help expand its “utility”:
[S]ales are about helping expand its utility – building RippleNet & supporting other biz building w/XRP ie Dharma & Forte. Reality is we decreased our sales by volume Q/Q and since then the inflation rate of [the cryptocurrency’s] circulating supply has been lower than that of BTC and ETH.”
Indeed, the company has seemingly been making progress because of the funds it has procured from the sale of the escrowed funds; the company last year made a large investment in Moneygram, one of the world’s leading money-transfer companies, spurring them to use RippleNet technologies.
Garlinghouse has also claimed that Ripple is eyeing other business opportunities, such as acquisitions and partnerships, with its strong balance sheet.
Featured Image from Unsplash
OhNoCryptocurrency via https://www.ohnocrypto.com/ @Nick Chong, @Khareem Sudlow