No FOMO Please!! Ripple CTO Explains Selling XRP Supports Market, Not a Dump

Ripple defends XRP sales as for liquidity, but a new transfer raises questions while the token eyes a potential 40% upswing.
No FOMO Please!! Ripple CTO Explains Selling XRP Supports Market, Not a Dump

Key Insights

  • Ripple's CTO recently clarified that Ripple's XRP sales are for liquidity management and that the company is not dumping on investors.

  • Ripple holds XRP in both escrow accounts and readily available portions, with tokens from the escrowed accounts being released only every 42 months.

  • However, only a day after Ripple's CTO's explanation, the company transferred another 50 million XRP into an unknown wallet.

  • In the charts, XRP is attempting to reclaim a break above an ascending trendline, with a possible 40% surge if it breaks above $0.55.

Ripple has come under fire in recent years from several sources including stakeholders, investors, traders and even law enforcement agencies.

The most recent issue with XRP is about its consistent sales of XRP tokens, which Ripple’s Chief Technology Officer, David Schwartz, recently took to Twitter to defend, calling them ordinary “sales”, and not “dumps”.

Why does Ripple consistently sell XRP against investors? How often does this happen, and does the company “actually” have to do any of that?

We’re Selling, Not Dumping

Ripple holds a massive amount of XRP in its reserves, which it regularly releases and sells at intervals.

These reserves are basically categorized into two distinct groups: XRP which is immediately accessible and XRP which is escrowed.

Ripple recently detailed the importance of these classifications in its 2024 Q1 report, released last week.

Per the report, the XRP in Ripple’s escrow accounts are only released every 42 months. This means that during these 42 months, the company has no access to these tokens.

Moreover, most of the tokens released monthly from the escrow account are not immediately used to flood the market but are rather re-locked and then released in the following month.

<div class="paragraphs"><p>Ongoing XRP sales</p></div>

Ongoing XRP sales

A Twitter user, Steve, drew attention to this issue in a recent tweet, in which he asked Schwartz why “Ripple are the biggest sellers of XRP”.

Schwartz responded, explaining that the alternative to Ripple selling the massive amounts of XRP in its accounts would be holding onto it indefinitely, which is not the most feasible option for the company.

Schwartz emphasized that instead, Ripple selling its holdings is a necessary evil, because the company needs to manage the liquidity of the locked tokens.

In essence, Ripple’s actions are mere “selling”, and not the “token dumps” they appear to be.

<div class="paragraphs"><p>More XRP sales</p></div>

More XRP sales

However, right on the heels of Schwartz’s explanation, Whale Alert drew attention to the transfer of another 50 million XRP tokens from Ripple Labs to an unknown wallet.

This tranche of tokens was valued at around $25.7 million at the time of the post and is the second one after another large-scale movement just last week, where over 100 million XRP were sent to an external wallet.

A Comeback on XRP?

According to the XRP weekly chart shown below, the cryptocurrency broke below the ascending trendline on 8 April, in an apparent slip-up from the bulls.

<div class="paragraphs"><p>XRP making a comeback</p></div>

XRP making a comeback

However, the bulls appear to be trying everything they can to make up for this blunder, by pushing the cryptocurrency back up above this ascending trendline as shown above.

XRP, at the time of writing, trades at around $0.54 and is less than a hair length from breaking above the psychological $0.55 resistance.

If indeed we see XRP break above $0.55, the cryptocurrency will be poised to rally further upwards by another 40%, in an attempt to retake the $0.75 zone or higher.

Disclaimer: Voice of Crypto aims to deliver accurate and up-to-date information, but it will not be responsible for any missing facts or inaccurate information. Cryptocurrencies are highly volatile financial assets, so research and make your own financial decisions.

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