Ripple, the issuer of XRP, is set to release 1 billion tokens worth $520 million on June 1. This common practice could potentially have a negative impact on the future price of XRP.
In the month of May, Ripple made some significant changes regarding the unlocking of tokens. Since 2017, the company has been unlocking 1 billion tokens on a monthly basis through escrows. Initially, they used the addresses ‘Ripple (22)’ and ‘Ripple (23)’, but in April, these addresses were replaced by the new addresses ‘Ripple (24)’ and ‘Ripple (25)’. These new addresses will continue to unlock 1 billion XRP each month until January 2025.
On May 1, Ripple unlocked 1 billion XRP from the new addresses and sold 200 million tokens to cover their expenses. The remaining 800 million tokens were re-locked until September 2027. Out of the 200 million XRP, 200 million was sent to the treasury address ‘Ripple (1)’. On May 13, Ripple sold 150 million XRP, releasing 75% of the allocated amount. The remaining 50 million XRP was sold on May 24, completing the monthly sales process.
The influx of such a large supply of tokens raises concerns about the potential impact of Ripple’s sales on the price of XRP. Historical data shows that XRP prices often drop during these sales periods. In 2024, only 5 out of the 12 sales resulted in positive price movements, while the remaining 7 saw price drops. This has made the sales process closely monitored by investors.
In the first 5 months of 2024, XRP experienced negative price movements in the first 3 months. However, after the unlock of 1 billion XRP on May 1, the price remained relatively stable.
As of now, XRP’s price is at $0.5174, experiencing a 0.73% drop in the last 24 hours. The market cap has fallen to $28 billion, and the 24-hour trading volume has decreased by 5% to $1.254 billion.
Please note that the information provided in this article should not be considered as investment advice. Investors should be aware that cryptocurrencies are highly volatile and carry inherent risks, and should conduct their own research before making any investment decisions.
