Ripple offloads 150 million XRP from June reserves causing price pressure
Ripple, the developer of the XRP Ledger (XRP) and the largest holder of the cryptocurrency, made a significant sale of 150 million XRP from its reserves on June 7. This transaction amounted to $78 million, which is equivalent to 0.25% of XRP’s total market capitalization of $29.25 billion, at a price of $0.52 per token.
On June 1, Ripple released 1 billion XRP from its initial distribution, which is now locked in monthly escrows until 2027. Subsequently, 200 million XRP was transferred to the company’s treasury account, while the remaining 800 million XRP was placed in new escrows.
Furthermore, an additional 200 million tokens were sent to the sell-off reserves by the ‘Ripple (35)’ account, bringing the total to 400 million XRP.
It is a usual practice for Ripple to transfer tokens from its treasury account, labeled ‘Ripple (1),’ to the unlabeled account ‘rP4X2hTa.’ This action leads to an increase in the circulating supply of XRP by introducing tokens that have not been in circulation before.
As of now, the tokens remain in the ‘rP4X2hTa’ account and are expected to be distributed to ‘rhWt2bhR’ and other intermediary addresses before eventually reaching cryptocurrency exchanges, similar to previous months.
The sale of XRP by Ripple has a direct impact on the price of the cryptocurrency, as it creates supply pressure in the spot market. Historical data shows that XRP usually experiences a price drop when Ripple sells its tokens. Out of the 12 sell-off days this year, only five resulted in positive price action, highlighting the importance of monitoring Ripple’s activities.
XRP has had a negative monthly performance in three of the first five months of 2024. Currently trading at $0.523, XRP faces increasing supply pressure, which investors should keep a close eye on, as Ripple’s sell-offs in June could potentially slow down a anticipated bull rally in the market.
Disclaimer: The information provided in this article should not be considered as investment advice. Investing in cryptocurrency carries risks, and investors should be cautious and aware of potential losses.
