News
Ripple floods the cryptocurrency market with millions of tokens, is XRP in danger?
Sun 23 June 2024 ▪ 3 minute read ▪ by Fenelon L.
Ripple, the issuer of the XRP cryptocurrency, shakes up the market with a massive sale of 250 million tokens on June 20. This operation, valued at $122.5 million, raises questions about the future of the token and its price.
Ripple opens its doors, 250 million tokens pour into the cryptocurrency market
On June 20th, Ripple, the company that issues the XRP Ledger, orchestrated a massive sale of 250 million XRP from its monthly reserves. This large-scale transaction, worth $122.5 million, shook the cryptocurrency market.
Previously, on June 1, Ripple had unlocked 1 billion XRP since its initial distribution, which had been locked in staggered monthly deposits until 2027.
The company then strategically allocated these funds: 200 million XRP fueled its Treasury account, while the remaining 800 million were blocked again in new deposits.
At the same time, the “Ripple (35)” account added another 200 million tokens to the sale reserves. This bold maneuver pushed the total stock of XRP ready to be liquidated stands at 400 million, breaking the company’s records in terms of preparing monthly sales.
The sales mechanism follows a well-oiled protocol: initially Ripple transfers the tokens from the Treasury account “Ripple (1)” to the anonymous account “rP4X2hTa”. Subsequently, these assets are dispersed across various exchange platforms, ready to enter the market and potentially influence its dynamics.
The consequences on the market
Ripple’s massive sales undeniably impact the XRP price. In fact, the token has generally experienced local declines during most of the company’s sales. Since January, only 5 out of 14 sales days have recorded positive price movements.
Likewise, XRP’s monthly performance in 2024 reflects this negative trend for three of the first five months. Currently, the token is trading at $0.488, down 5.5% since June 1, likely indicating another month of deficit.
In summary, this commercial strategy fits into a complex regulatory context. In fact, Ripple has been facing legal action at the SEC since 2020.
Therefore, the company seems to be aiming to conform to the future crypto industry regulations. By reducing its hold on XRP, Ripple may be attempting to demonstrate that the token is not a financial security under its control.
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Fenelon L.
Passionate about Bitcoin, I want to explore the meanings of blockchain and cryptocurrencies and participate in my discoveries with the community. My dream is to live in a world where privacy and financial freedom are guaranteed for everyone, and I firmly believe that Bitcoin is the tool that can make this possible.
DISCLAIMER
The views, thoughts and opinions expressed in this article are solely those of the author and should not be relied upon as investment advice. Do your research before making any investment decisions.