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Ripple keeps 20% of 1 billion tokens unlocked this month; XRP price impact

Ripple keeps 20% of 1 billion tokens unlocked this month; XRP price impact

On October 1, Ripple unlocked 1 billion XRP tokens from its escrow system but immediately re-locked 800 million XRP (80%) in new contracts set to finalize by 2027. It is expected that the company will soon put the remaining 200 million (20%) tokens in circulation, which could affect the digital asset’s price.

Notably, the XRP’s considered circulating supply by the CoinMarketCap index remains the same at 53.312 billion, as reported by Finbold on September 30, before the 1 billion tokens unlock.

XRP Circulating Supply. Ripple tokens
XRP Circulating Supply. Source: CoinMarketCap

This happens because recently unlocked tokens in Ripple’s stash are not considered circulating until the company spends (or sells) them. Ripple has been reportedly selling most of what is not re-locked each month.

Interestingly, the 200 million XRP accounts for around $102 million (at $0.51 per token by press time) and will increase the current XRP’s supply by 0.37% — which would result in a yearly supply inflation of around 4.44% if Ripple keeps this observed pattern.

Where did the unlocked 1 billion XRP go?

Similar to what happened in September, the 1 billion was unlocked by two wallet addresses under the company’s control: Ripple (22) and Ripple (23). It was then sent to three other accounts of the same ownership.

  • Ripple (1) received 200 million XRP from Ripple (22), which is still liquid and ready to be spent.
  • Ripple (10) received 300 million XRP from the remaining 500 million tokens unlocked by Ripple (22). Of which:
    • 200 million XRP was re-locked into an escrow set to be unlocked by March 2027
    • 100 million XRP was re-locked into an escrow set to be unlocked by April 2027
  • Ripple (11) received 500 million XRP from Ripple (23), all re-locked into an escrow set to be unlocked by March 2027.
Monthly escrow Ripple (XRP) | October 2023
Monthly escrow Ripple (XRP) | October 2023. Source: Finbold

Everything happened 18 hours after the escrow finality, with no more than 20 minutes between the first to the last transaction, according to on-chain data retrieved by Finbold on October 3, from XRPScan.

Additionally, both Ripple (22) and Ripple (23) still hold 5 billion XRP tokens for monthly escrows that will be finalized in the next five months until February 29, 2024.

Will Ripple follow the same spending pattern from September?

From the left 200 million XRP kept by Ripple in September, 100 million tokens were spent on September 11 amid a price crash following news related to FTX’s assets liquidations a day before.

75 million XRP were spent six days later on September 18, and another 50 million tokens were put into circulation on September 22 — from the left 25 million XRP of September’s escrows, plus another 25 million tokens from past releases.

All of them ended up in four different centralized exchange known addresses, which impacts XRP price by creating extra selling pressure to spot book orders. The market will follow October’s Ripple spending in order to forecast future impacts and trading opportunities.

Therefore, the extra selling pressure from the supply side will require a higher demand for the digital asset, in order to prevent meaningful price drops. However, even the mere expectation of a sell-off could lead investors to try to front-run Ripple.

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