XRP has recently suffered a sharp drop, sparking concerns among investors. The drop came after Ripple Labs released a considerable amount of the crypto asset, prompting an immediate reaction in the market.
Ripple Triggers New XRP Release
Since last month, Ripple had been planning to release 1 billion XRP, in line with its monthly practice that began in 2017. This Friday, the crypto company unlocked 500 million XRP, which represents an approximate market value of $298 million.
This regular release by Ripple is a tactic to manage XRP’s liquidity and volatility. However, the strategy is being closely scrutinized by investors and analysts. Data indicates that this move is likely to increase selling pressure among holders of the crypto asset.
Therefore, to stabilize the supply of XRP on the market, Ripple often blocks a portion of the released tokens. This time, the crypto company secured 800 million XRPworth approximately $466 million, into an escrow account across multiple transactions. The move underscores its commitment to maintaining economic balance in the market.
Consequences of the unlocking on the crypto market
Despite Ripple’s measures, the market’s reaction was not long in coming. The price of XRP fell by more than 7% following the unlocking announcement. This is evidence of the direct impact of Ripple’s actions on market dynamics. In addition, a 10% drop in trading volume in 24 hours was recorded, indicating that investors may be reconsidering their positions.
However, despite this immediate volatility, XRP has shown remarkable resilience over a 30-day period. The crypto asset has notably recorded an 18% increase in its value. Furthermore, the growing interest in XRP is visible through the increase in wallets holding more than 10,000 XRP, with over 2,300 new listings in the last five weeks. This renewed interest indicates that XRP continues to attract both attention and speculation.
The long-term impact of these events will largely depend on Ripple’s regulatory decisions and strategies to manage the supply of its crypto. Investors and observers will need to stay tuned for the company’s next steps to stabilize and potentially increase the value of XRP.
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