A whale transaction involving 400 million XRP, worth approximately $213.9 million, was unlocked from an escrow wallet.
A whale transaction involving 400 million XRP, worth approximately $213.9 million, was unlocked from an escrow wallet.
According Whale alert, the 400 million processed on the Ripple blockchain are located between two unknown wallets. The transaction is generating a stir in some sectors of the XRP community. Some consider this a dump, while others see it as a sign of incoming inflation.
“Locking” and “unlocking” Ripple escrow
According to data shared by Whale Alert, the transaction had a nominal fee of 0.0001 XRP. Ripple’s escrow system, launched in December 2017, is a way to ensure the predictability and stability of the XRP market while providing liquidity.
On Friday, May 3, Ripple Labs transferred 800 million XRP to an escrow wallet to rebalance the circulating supply of the digital currency in three tranches. The blockade did not result in the recovery of the losses suffered the previous week.
Ripple escrows typically unlock approximately 1 billion XRP each month, with any unspent portion returned to escrow. The unlocking of 400 million XRP is generating speculation about the trajectory of the XRP market in the coming days.
Market response to 400 million XRP unlocking
Despite the major unlock, the reaction within the XRP market has been relatively calm. Although large unlocks can lead to volatility due to increased liquidity and potential market speculation, at the time of writing, the price of XRP as displayed on CoinMarketCap reveals that XRP is up 1.93% at $0.5303.
While the unlocking of 400 million XRP did not cause significant market turmoil, industry observers advise investors to continue monitoring Ripple’s escrow activity and its potential impact on the broader cryptocurrency market.
The ongoing legal battles Ripple faces with the US Securities and Exchange Commission (SEC) continue to trail the exchange. Ripple recently filed a crucial response to the SEC’s appeals report in April, where the regulator requested disgorgement of profits derived from XRP sales and civil penalties.
