News
Bad news? Ripple will sell 400 million XRP cryptocurrencies in June
Mon 03 Jun 2024 ▪ 3 minute read ▪ by Luc Jose A.
In a move that could profoundly shake the cryptocurrency market, Ripple plans to sell 400 million XRP during the month of June, making it the largest token sale in seven years. This decision, which comes in a context of growing volatility, is provoking strong reactions among investors and observers. Why did Ripple choose this time to make this massive sale and what will the implications be?
A historic cryptocurrency sale
On June 1, Ripple unlocked one billion XRP, worth $520 million, through the XRP Ledger escrow system. Usually, Ripple transfers 200 million tokens to its treasury every month, but this time, a dormant account known as “Ripple (35)” added an additional 200 million XRP to “Ripple (1)”. This suggests an even bigger selloff this month.
Since implementing escrow in 2017, Ripple has consistently reserved up to 350 million XRP for its monthly sales. In 2024, monthly sales ranged between 200 and 260 million XRP. If Ripple goes ahead with its planned sale of 400 million XRP this month, it would be its largest sale in seven years, potentially creating turbulence in the cryptocurrency market. Transactions are verifiable on the blockchain via XRP Scan, thus offering total transparency regarding the movements of the company’s funds.
The reasons behind the massive sell-off of XRP
David Schwartz, CTO of Ripple, explained the reasons for this massive sales strategy. According to him, Ripple holds a considerable amount of XRP and regularly selling these assets is the only viable alternative to avoid holding them indefinitely. This approach allows Ripple to finance its ongoing operations, support the development of its ecosystem, and stabilize the cryptocurrency market while avoiding a sharp devaluation of XRP.
Ripple currently holds 4.8 billion XRP in its wallet and 40.1 billion in escrow, the latter released progressively each month over a 42-month period. This controlled release strategy aims to instill confidence among investors ensuring greater transparency on XRP sales. Despite these measures, Ripple’s continued sales of XRP raise questions about their long-term impact on the cryptocurrency’s value and its perceived usefulness to users.
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Luc Jose A.
Graduated in Science Po Tolosa and holder of a blockchain certification consultant issued by Alyra, I returned to participate in Cointribune in 2019. Capturing the potential of blockchain to transform numerous sectors of the economy, I have made a commitment to raise awareness and inform the great public about this constantly evolving ecosystem. My goal is to allow anyone to better understand blockchain and learn about the opportunities it offers. I strive every day to provide an objective analysis of current events, to decipher market trends, to convey the latest technological innovations and to put into perspective the economic and social efforts of this revolution in brands.
DISCLAIMER
The views, thoughts and opinions expressed in this article are solely those of the author and should not be relied upon as investment advice. Do your research before making any investment decisions.