- Ripple’s periodic sale of XRP, amounting to $200 million each month to fund operations, has drawn criticism from the community for allegedly suppressing the token’s price.
- Ripple expert Mickle argues that the impact of these sales is minimal due to the highly liquid and extensive XRP market. Mickle highlights that institutional clients and strategic investors, who purchase Ripple’s XRP holdings.
Every month, Ripple unlocks a total of $1 billion worth of its native crypto XRP from its escrow accounts. Although Ripple has locked 80% of the XRP tokens i.e. 800 million XRP in escrow, the rest 20% i.e. 200 million is periodically offloaded to fund the company’s operations.
With this periodic sale, some of the community members of Ripple have criticized the firm for keeping the XRP price suppressed. The Good Morning Crypto podcast created a poll recently reflecting the community sentiment. In the poll, nearly 68% of the total 2000 voters expressed dissatisfaction with Ripple’s periodic XRP sales saying that it prevents the price from surging ahead.
VOTE HERE: Are the $XRP sales by Ripple contributing to the price suppression of XRP ? 🤔💭
— Good Morning Crypto (@AbsGMCrypto) January 8, 2024
However, a Ripple expert Mickle came up with a plausible explanation while dismissing these allegations. The expert highlighted multiple factors indicating that the impact of Ripple’s periodic sales on XRP is minimal. According to Mickle, Ripple strategically manages its sales to prevent flooding the market with large quantities of XRP.
The expert highlighted that Ripple-related XRP sales make up only a small fraction of the token’s 24-hour trading volume, minimizing any potential impact on its price. Mickle noted that the XRP market is highly liquid and extensive, with Ripple’s periodic sales being insignificant compared to the overall trading volume.
Additionally, Mickle identified institutional clients and strategic investors as the primary buyers of Ripple’s XRP holdings. This strategy fosters long-term benefits, such as increased adoption and utility, which outweigh short-term price fluctuations.
Bitcoin Performance Influences XRP Price
Citing historical data, Mickle said that Bitcoin’s performance has a greater impact on the XRP price instead of Ripple’s periodic sales. Similar to other altcoins, XRP is largely correlated with BTC. Of course, there have been times when XRP has decoupled from Bitcoin, as happened last week per the Crypto News Flash report. As of press time, the XRP price is trading 8.38% up once again reaching the key resistance of $0.60.
On-chain data also shows that the XRP Ledger has experienced remarkable growth recently with the total interacting addresses and new addresses surging to their highest levels since March 2024. On Thursday, the XRP Ledger experienced the creation of 1,721 new XRP wallets in a single day, the highest number since March 30. Furthermore, 47,363 individual addresses interacted on the XRP network, marking the highest level of activity since March 9. This surge highlights the growing interest and participation in the XRP ecosystem. Besides, there’s also been strong whale activity around XRP per the CNF update.
XRP Ledger is seeing a substantial amount of both new addresses created and total addresses interacting on the network. Both are at their highest levels since March. pic.twitter.com/AIeWzwannc
— Santiment (@santimentfeed) July 18, 2024
The Ripple vs SEC case has also taken new turns recently. As updated by CNF, The SEC canceled a closed-door meeting scheduled earlier this week where officials were expected to discuss key cryptocurrency issues, including the impending settlement with Ripple.
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