- Ripple released 1 billion XRP for December in two transactions.
- One address (Ripple 9) received 500 million tokens at 21:00 UTC.
- Another address (Ripple 28) received 500 million tokens 11 minutes later, at 21:11 UTC.
- On December 1, Ripple put 700 million XRP back into escrow, lowering supply.
- In part, because of a strong market, XRP rose 10% in 24 hours to $2.20.
2 billion XRP were released from escrow after Ripple’s unlocked 1 billion XRP for December in 2 transactions of 500 million XRP. Subsequently, XRP increased in price by 10%. Once held by Ripple, many tokens were added to circulation in December after restrictions were lifted. There were many price increases in December, January, and February in part because of strong market XRP demand. This Ripple price and supply increase order led to speculation in many crypto markets.
Ripple released 700 million XRP back to escrow after the
most recent withdrawal from escrow. This continues Ripple’s exercise of returning tokens and the ongoing strategy of managing supply while interspersing offers. This month’s exercise was no different as Ripple sent over 700 million XRP back into escrow only hours after the unlock.Ripple Escrow Releases 500M XRP to Ripple (9) Address
Yesterday at 21:00 UTC, Ripple finished half of the December unlock to the Ripple (9) Address. Last transaction, this wallet that regularly gets escrow unlocks, holds over 500,000,204 XRP, or over 1.08 billion dollars at the time of the transaction.
Only 11 minutes after, they completed the other half of the scheduled release. Ripping another 500M XRP was transferred to the Ripple (28) Address, publicly recognized as the wallet: rMhkqz. This finalized the 1 billion XRP release scheduled for December.
Such unlocks Ripple has been doing and part of the original Ripple plan in 2017, to unlock 1 billion XRP every month for various operational needs such as liquidity, partnership deals, and the growth of the ecosystem. Still, not every token gets used right away.
Ripple Gets Back 700M XRP from Escrow
Just like in previous cycles, Ripple returned a large portion of the unlocked supply back to escrow. On-chain data shows that:
- 300M XRP got returned from the Ripple (15) address
- 400M XRP got relocked from the Ripple (14) address
This mechanism of re-locking helps Ripple manage how much XRP gets released into the market, avoiding oversupply, thus tapering the market volatility.
The process of returning unused XRP is a part of a broader liquidity strategy from Ripple to achieve:
- Controlled circulation of the tokens
- Stability in the market over a long period
- Predictability of release in the market
- Growth of the ecosystem in a balanced manner
This month, the return of 700M XRP is a clear show of Ripple’s dedication to maintaining a balanced supply.
Surge in XRP Prices Following Ripple Escrow Unlock
In a surprising turn of events, the escrow unlock coincided with a strong recovery of the market. Following the unlock, XRP prices surged by 10% to reach 2.20, a sizable price jump after a long period of price consolidation, all of which is consistent with a strong recovery in the broader crypto market.
What was Sparked the Rally?
The rally was not only due to the escrow releases. There are a number of macro and market elements.
1. There was a market recovery led by Bitcoin.
The price of Bitcoin jumped by 8%, and this raised the confidence of investors once again. Traditionally, XRP follows the greater market. So when Bitcoin rises, altcoins, including XRP, follow.
2. There was a shift in policy by the US Federal Reserve.
The Federal Reserve put a stop to the quantitative tightening (QT) and infused a lil over $13.5 Billion into the United States Financial System. Such liquidity inflow supports riskier investent, including cryptocurrencies.
3. Positive Changes in the Market
The traders viewed the combination of liquidity from the Fed and a strengthening market from easing policy as a bullish indicator causing an acceleration in the price of XRP.
Despite Ripple’s release of $1 Billion dollars worth of XRP, the price action indicated that traders remained unconcerned about short-term over supply. Rather, the market reaction was bullish as a larger volume of the unlocked tokens were returned to escrow instead of being fully released into circulation.
Where are we Going?: What are the Implications?
The sequence of escrow releases is well established, yet we are not we are not getting any escrow releases. This shows that the XRP market participants believe that Ripple’s remaining monthly token drops are non events. This means that since the released tokens flow back to escrow, the net circulating supply of XRP is unchanged.
The following are the expected driving forces behind the price of XRP according to analysts:
- The evolving legal battle with the SEC and the outcome anticipated by many investors.
- Trends within the wider digital market.
- The shifting liquidity in Ripples ODL.
- The December investor emotions which coincide with the legal outcome expected by many also.
In case the market continues to be bullish, XRP will likely stay in the $2 range and continue to regain higher resistance levels.
