Ripple unlocked 1 billion XRP coins from its escrow wallet on the first day of July. The move was a planned part of Ripple’s escrow policies, however, it lowered the XRP price by more than 6% in a few hours today.
As the crypto tracker Whale Alert reported, nearly $329 million worth of XRP coins had left the escrow wallet to Ripple’s account during two identical transactions earlier on Friday.
The circulating supply of the 8th biggest crypto by market cap sits at 48.34B XRP at the time of writing, according to CoinMarketCap.
Billions of XRP Locked to Stabilize Supply
The blockchain payment company Ripple Labs locked 55 billion XRP coins, or 55% of its total supply, into multiple ledger escrows back in 2017. According to the company, this was done in order to ensure additional predictability to the XRP supply.
Escrows that exist on the XRP ledger and are controlled by a consensus mechanism keep the established amount of coins locked and deliver them later when certain conditions are met.
Since February 2018, Ripple’s escrows are set to unlock 1 billion XRP coins every month. The company, however, has the right to return a certain amount of the coins into a new escrow, which it usually does.
Within the past 44 months, Ripple has unlocked 54 billion coins and has also returned 44.5 billion XRP to the escrows as of today. This converts to around 800 million XRP on average every month.
The company has made a decision to return the majority of unlocked XRPs back to the escrows due to its ongoing lawsuit with the SEC. It usually locks back the released coins several hours after the unlocking.
However, Whale Alert has not reported any massive XRP transfers back to Ripple’s escrows since the 1 billion XRP unlock earlier today, meaning that the company has not started to return coins back to the escrow yet.
XRP Price Declined
Meanwhile, the price of XRP plummeted by more than 6.2% a few hours after the billion new coins flushed into circulation. The coin touched the lowest level of $0.3123 today and floats just sat above the same level at the time of writing.
XRP has been on a rise on Thursday, increasing more than 8% within a day after the prolonged decline since June 24. The coin then touched the level of $0.3749 prior to losing more than 17% of its value in a single week.
The price decline coincided with massive XRP token transfers from wallets to crypto exchange Bitstamp. As crypto tracker Whale Alerts reported, around 600 million of XRP coins were moved into anonymous wallets on Bitstamp in multiple transfers over the last week of the second quarter.
Historically, rising coin inflows are seen as a bearish trend signal, as it indicates that investors are wary of long-term holdings.