Ripple Sells XRP on a Large Scale – Chief Technology Officer Attempts to Explain

Ripple has already sold XRP for more than $500 million in 2024. Critical investors see this as damaging to the price development of XRP. Ripple Chief Technology Officer David Schwartz is trying to calm tempers.

This year’s upward trends and price gains in Bitcoin, Ethereum and other important cryptocurrencies are bypassing XRP

On the contrary: At the turn of the year, XRP was still trading at a good $0.60, and is currently trading at $0.53. Analysts point to Ripple’s handling of its XRP reserves as a possible cause. The crypto company has been following this issue for years.

One thing is clear: Ripple still has a good 40 billion XRP stored in a kind of escrow account and around 4.8 billion in an account for short-term liquidity. This is offset by 55 billion XRP circulating on the free markets. Every month, 1 billion XRP is automatically released from the escrow account for Ripple. With this construct, Ripple wants to secure its financing and at the same time prevent itself from influencing the price discovery of XRP. In 2022 and 2023, Ripple even temporarily bought back XRP.

But this year, the company has started monetizing XRP again. Finbold calculates that from January to April 2024, the company sold a good 240 million XRP per month, totaling more than 500 million US dollars. Even when the crypto markets temporarily experienced a price crash in mid-April because the conflict between Iran and Israel escalated, Ripple simultaneously threw XRP onto the market. Critical investors see this behavior as constant dumping, i.e. price pressure on XRP, which Ripple itself is causing.

Chief Technology Officer David Schwartz has now spoken out on X. “Why is Ripple the biggest seller of XRP?” he was asked there last week. Schwartz replied: “Because Ripple has the most XRP and (…) the only alternative to selling would be to hold on to most XRP indefinitely.” But the community is not very convinced of this. It offers suggestions: Ripple could gradually destroy (“burn”) its XRP, distribute it as an airdrop to long-term investors or simply leave it in reserves. In general, people would like to know when and how Ripple plans to stand on its own two feet financially and not be dependent on the XRP allocations. Schwartz remains silent on this.

Conclusion: Is Ripple damaging the price development of XRP?

The US Securities and Exchange Commission (SEC) believes that Ripple is financially dependent on XRP sales and is bringing this into the ongoing court proceedings. This concerns institutional buyers and direct deals. However, the XRP price curve also usually shows weaknesses when Ripple sells. The amounts involved are responsible for less than 1 percent of the volume on the XRP markets.

But a look at the historical price development of XRP suggests that Ripple is harming investors with its strategy. Because if the company is already reporting significant financial needs to drive the expansion of the ecosystem, success should also follow. Instead, however, Ripple now wants to launch its own stablecoin, which justifiably raises the question: what will XRP be good for in the future? Anyone who invests in XRP as a private investor should definitely familiarize themselves with Ripple’s monetary policy and strategic direction.

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(Featured image by FXTM Thailand CC BY 2.0 via Flickr)

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