Distributed ledger company Ripple Labs has unlocked 1 billion XRP worth $1.6 billion from its escrow wallet on May 1, according to Whale Alert, a service that tracks the movement of large amounts of cryptocurrencies.
Ripple Releases $1.6 Billion XRP from Escrow Account
The fourth-largest cryptocurrency by market cap, XRP has recently released about 1 billion XRP worth about $1.6 billion, from an escrow account.
Apparently, the release was made in two transfers with 500 million XRP in each transaction.
Usually, this is executed on the first day of each month and has been for several years already. Such transactions boost the liquidity in the Ripple network as people gain access to buy the XRP token.
The goal is to support the liquidity of XRP on crypto exchanges while sending some to Ripple’s partners and customers and using the XRP digital asset for covering the company’s current operational expenses.
Whale Alert tracked the massive transactions in real-time which occurred in two different 500 million XRP transactions worth about $1.6 billion.
500,000,000 #XRP (795,433,689 USD) unlocked from escrow at Ripple Escrow wallethttps://t.co/gQXvkEmsCf
— Whale Alert (@whale_alert) May 1, 2021
At the time of writing, XRP was trading at $1.61 with a daily trading volume of $6 billion. The digital asset is up 3.1% for the day. Its current market value stands 73 billion with a circulating supply of 46,020,451,007 XRP and a maximum supply of 100,000,000,000 XRP coins.
XRP Price Not Affected from the Programmed XRP Withdrawals
Unlike other cryptocurrencies, a single entity controls the majority of the global XRP supply. This entity is Ripple Labs, the payments company set up by the co-founders of XRP.
At the end of 2017, Ripple announced that it would be releasing the XRP it holds in escrow accounts over the course of 55 months to control the price of the token.
To dismiss fears that the company could one day dump the whole hoard of treasure onto the market, it held in escrow 55% of the total supply of 100 billion tokens. While, Ripple Labs kept 20 billion, or 20%, of the XRP tokens.
Ripple often returns most of the XRP it released from escrow right back to the escrow wallet. Last month, the company returned 90%, or 900 million, XRP tokens to escrow.
Contrary to popular beliefs, these programmed XRP withdrawals from escrow do not impact the cryptocurrency’s prices.