XRP, the digital asset associated with Ripple Labs, has seen a significant price increase of 1.83%. This surge comes amidst Ripple’s release of 1 billion XRP coins into circulation as part of their monthly planned coin distribution strategy. This move increases the total number of XRP tokens available by about 1.87% from the previous total of 53.312 billion tokens.
Gradual Unlock of XRP Tokens
Ripple Labs has been gradually releasing its XRP tokens as part of a monthly distribution plan. As per information from @Whale_Alerts, around 1 billion XRP has been released from escrow through three transactions involving two different wallets.
In the first transaction, 400 million XRP tokens worth more than $205.9 million were unlocked.
The second transaction released 100 million XRP tokens valued at $51.4 million.
In the final transaction, Ripple unlocked 500 million XRP tokens worth $257.3 million. Considering XRP’s current market price of $0.5177, these unlocked tokens are valued at over $514.6 million. Importantly, these tokens are still owned by Ripple Labs.
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What’s the Strategy at Play Here?
This action aligns with Ripple’s long-term plan, which involves gradually releasing XRP tokens over an extended period. This practice has been in place since 2017, with Ripple consistently releasing 1 billion XRP tokens each month. Ripple contends that this approach enhances the accessibility and utilization of XRP but also leads to a consistent influx of coins into the market.
Ripple is dedicated to maintaining the stability of the XRP price. To achieve this, they have consistently returned 800 million XRP (equivalent to 80% of the release) to their coin storage in recent months.
For example, in September, Ripple swiftly returned 800 million XRP (equivalent to 80% of the unlocked tokens) to escrow. The exact amount slated for return to escrow this month is yet to be determined.
Then again in October, Ripple locked back the 800 million XRP coins that were recently released from escrow.
Was the XRP Price Impacted?
Ripple’s recent unlocking of the tokens has not negatively impacted the XRP price. Over a seven-day period, XRP has experienced a 1.83% increase in value.
Nonetheless, the short-term outlook for XRP’s price remains uncertain, with various predictions circulating regarding the token’s potential value, some suggesting it could reach as high as $21 in the coming years.
Also Read: XRP Army’s Positive Outlook: Insights on Staying Bullish Beyond Ripple’s Crossovers
Source: https://coinpedia.org/news/xrp-price-on-the-rise-as-ripple-releases-1-billion-tokens/