Crypto: Ripple Releases Another 1 Billion XRP... And It's Still Not Over!

Yesterday, 1st September 2024, Ripple once again unlocked 1 billion XRP tokens from its escrow accounts. This operation immediately caught the attention of investors and market observers. Although routine, it once again raises questions about Ripple’s long-term strategy and its impact on the crypto market.

A Deliberate Management of XRP Supply

Ripple unlocked 1 billion XRP tokens from its escrow accounts on September 1st, at 10:50 UTC. This operation was valued at over 560 million dollars, according to data provided by Whale Alert, a crypto wallet monitoring service. David SCHWARTZ, Ripple’s CTO, explained that the XRP tokens released monthly aim to offer market predictability. Since 2017, Ripple has locked 55 billion XRP in escrow accounts to control the circulating supply and limit fluctuations. SCHWARTZ also noted that these escrow accounts expire at the beginning of each month, but the XRP remains there until someone decides to cancel them.

Despite this monthly release strategy, the actual number of tokens entering the market is often lower than the unlocked amount. This allows Ripple to manage the XRP supply more precisely, in accordance with market conditions and the company’s needs. However, the recent release coincided with a 2.4% drop in the price of XRP, which is currently trading at around 0.557 USD. This price drop has reignited debates about the effectiveness of this supply management strategy, with some experts questioning the transparency and motives behind Ripple’s regular releases.

A Reevaluation of Escrow Effectiveness

The escrow strategy has been in place for several years at Ripple. However, David SCHWARTZ has expressed doubts about the relevance of this approach. According to him, he was initially “opposed to its creation” and continues to wonder if this method was the best option for the XRP network.

Brad GARLINGHOUSE, Ripple’s CEO, has also hinted that the company might explore more radical options, such as destroying the remaining tokens in the escrow accounts. If this were to come to fruition, it could cause a scarcity effect that might potentially boost the price of XRP.

In any case, Ripple stands at a strategic crossroads, with important decisions to be made to restore investor confidence following the recent decline in XRP and the legal battles of recent months.

Luc Jose A.

Diplômé de Sciences Po Toulouse et titulaire d'une certification consultant blockchain délivrée par Alyra, j'ai rejoint l'aventure Cointribune en 2019. Convaincu du potentiel de la blockchain pour transformer de nombreux secteurs de l'économie, j'ai pris l'engagement de sensibiliser et d'informer le grand public sur cet écosystème en constante évolution. Mon objectif est de permettre à chacun de mieux comprendre la blockchain et de saisir les opportunités qu'elle offre. Je m'efforce chaque jour de fournir une analyse objective de l'actualité, de décrypter les tendances du marché, de relayer les dernières innovations technologiques et de mettre en perspective les enjeux économiques et sociétaux de cette révolution en marche.