Ripple's 1 Billion XRP Release Imminent…Will Prices Plummet?

▲ Ripple (XRP) ©

XRP (Ripple) is once again at the center of supply burden controversy ahead of a large-scale lockup release scheduled for next month. With Ripple set to release a total of 1 billion XRP from escrow on June 1st, the market is highly attentive to the actual volume of circulating supply.

According to the cryptocurrency media outlet Finbold on May 25th (local time), Ripple will release 1 billion XRP from escrow on June 1st, following its existing monthly operational schedule. Considering the current XRP price is around $1.36, the volume of this release amounts to approximately $1.36 billion. Analysis suggests that concerns over increased supply are re-emerging as a market variable, especially given that XRP has recently failed to reclaim the $1.40 resistance level.

The current circulating supply of XRP is approximately 61.85 billion, with a significant portion of the maximum supply of 100 billion still locked in Ripple's escrow system. In December 2017, Ripple introduced a structure that locked a total of 55 billion XRP in time-based smart contracts to increase the predictability of the supply schedule. Since then, a system has been maintained where up to 1 billion XRP is sequentially released on the first day of each month.

However, there are also observations in the market that the actual selling pressure might be more limited than expected. The media outlet reported that Ripple has historically re-locked most of the monthly released supply into new escrow contracts. In fact, Ripple has repeatedly re-locked approximately 600 million to 800 million XRP out of the 1 billion XRP released each month.

Considering this, the net circulating supply remaining in the market is likely to be around 200 million to 400 million XRP. Converted at current prices, this amounts to approximately $272 million to a maximum of $544 million. Ultimately, the market's main concern is not the '1 billion XRP release' itself, but rather how much of that supply Ripple will actually liquidate.

The market is also paying attention to the possibility that concerns over increased supply could stimulate short-term volatility, especially as XRP prices continue their bearish trend recently. However, some investors find significance in the fact that Ripple's escrow system operates according to a publicly disclosed schedule, implying a predictable supply structure.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*