Posted 2 years ago | by Ben Armstrong
200 Million XRP to Hit the Markets (Maybe)
Whale Alert recently spotted a transaction between an XRP address, which is the Ripple Escrow wallet, and an address owned by Ripple Labs. There was a large token lockup of 200,000,000 XRP transfered from the wallet to Ripple Labs.
Following that, the token monitoring service saw 1,000,000,000 XRP also unlocked from escrow at Ripple Escrow wallet, which implies that even more of the token may be sold or distributed, which could equates to increased selling pressure in the market.
XRP's price has been under pressure over the last few months, and has broke below the $0.20 USD level in recent weeks. At the time of writing, XRP has broken back above $0.215 USD, which may be a bullish signal over the medium term.
XRP’s Wacky Tokenomics
Whatever Ripple did, analysts say that Ripple has this ability to present a potentially long-term bearish case for XRP. Bully is a popular cryptocurrency commentator, and they left a tweet knocking Ripple’s dumping of XRP on retail investors.
Founder of Quantum Economics and the former senior analyst at crypto and asset exchange eToro, Mati Greenspan, remarked on twitter that XRP’s tokenomics have two primary flaws:
According to Greenspan:
- Ripple holds a large portion of tokens and sells them into rallies.
- Usage of the network does not necessarily require XRP tokens. Banks can use Ripplenet without using the token
Falling XRP Sales
According to Ripple’s Q3 2019 XRP Markets report, the three months of that fiscal quarter XRP sales still amounted to $66.24 million, though there was a decrease in the sale of their flagship cryptocurrency. In Q2, this figure was closer to $250 million.
Analysts in the cryptocurrency space, including people like Multicoin Capital’s Kyle Samani, have suggested that Ripple can release millions of XRP onto the public market to drive down prices. Back to August 2019, Ripple chief executive, Brad Garlinghouse claimed that the mass sale of the XRP tokens is not an attempt to dump on retail investors.
XRP sales are about helping expand the asset’s utility – building RippleNet & supporting other biz building w/XRP ie Dharma & Forte. Reality is we DECREASED our sales by volume Q/Q and since then the inflation rate of XRP circulating supply has been lower than that of BTC and ETH.
For the moment, it would appear that there are larger forces driving the price of XRP. Whether or not these odd tokenomics will keep XRP prices down in the long-term is anyone's guess.