Ripple has continued to pour billions of dollars into its own cryptocurrency XRP, spending almost $2.6 billion on the token last quarter.
The firm — still embroiled in a tense SEC battle over the securities status of XRP — netted slightly more by selling XRP over-the-counter, pulling in more than $2.9 billion throughout Q1.
That means Ripple directed cash equal to 88% of quarterly XRP sales revenue towards buying the cryptocurrency on secondary markets. It spent 6% less than the previous period.
XRP jumped about 60% across Q1, buoyed by similar rallies for bitcoin (BTC) and ether (ETH).
Ripple’s net XRP sales were worth around $361 million last quarter, with tokens going to customers utilizing its blockchain-powered payments rails, which it calls “On-Demand Liquidity” (ODL).
Ripple’s ODL is a different system to its new bank-focused settlement protocol RippleNet, which due to current regulatory concerns cannot support XRP as yet.
Ripple sells XRP to ODL users in transactions that don’t directly impact prices on crypto exchanges. It stopped selling XRP programmatically back in 2019.
Ripple’s XRP buying and selling fell slightly this quarter, but both still way up on 2021
The San Francisco-headquartered firm began buying XRP one year later, Blockworks previously reported. At the time, Ripple stated it was doing so to “support healthy markets.”
Since then, Ripple has dramatically ramped up its XRP purchases — which do interact with crypto exchange prices — despite its high-profile run-in with the SEC.
XRP traded for $0.22 shortly after the SEC’s lawsuit went public, but rallied up to 700% during the 2021 bull market. It’s now hovering around $0.47.
Still, the exact impact of Ripple’s market activity on XRP’s price remains unclear. Blockworks has reached out to Ripple for comment.
“Since 2020, Ripple has sourced XRP from the open market to ensure there is a sufficient supply of XRP available for our growing ODL business,” Ripple said in its disclosure.
“We continually strive to minimize undue market impact with our purchases by, for example, limiting how much and from whom we purchase XRP.”
Ripple briefly stopped buying XRP amid US banking crisis
Ripple has now spent $10.9 billion on buying XRP since the SEC filed charges against the firm and its executives in Dec. 2020. The SEC alleges Ripple’s historic XRP sales constituted a $1.3 billion unregistered securities offering.
Ripple had only disclosed $80.4 million in XRP purchases until that point.
Ripple’s buys coincide with a huge boost in ODL-related sales, now at $14 billion since the SEC’s lawsuit.
Ripple has effectively recycled 78% of its XRP sales revenue to buy the token on secondary markets since the allegations first broke.
The firm said that it paused its XRP buying for “several days” due to the US banking crisis in March.
“This activity has since resumed and the company expects to continue to undertake purchases as ODL adoption grows,” Ripple said in its disclosure.
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Source: https://blockworks.co/news/ripple-xrp-sec-lawsuit