Ripple's $1.38 billion worth of supply released... Will XRP price shock occur?

▲ XRP(Ripple) ©

Although 1 billion XRP (Ripple) were released from escrow at once, the actual increase in circulating supply and price shock depend on how much Ripple locks back up, according to analysis. The value of the released supply amounts to approximately $1.38 billion.

According to crypto media outlet Finbold on September 1 (local time), Ripple released a total of 1 billion XRP from escrow through three transactions: 100 million, 400 million, and 500 million. Applying the price at the time, approximately $1.38, the total value of the released amount is about $1.38 billion. With this release, Ripple's escrow holdings decreased from approximately 32.28 billion to 31.28 billion XRP.

This release is part of a monthly program introduced by Ripple in December 2017 when it deposited 55 billion XRP into time-based escrow contracts on the XRP Ledger. The protocol automatically releases up to 1 billion XRP on the first day of each month, making them available for use by accounts managed by Ripple. The released supply can be used for operating expenses, sales to institutions, and On-Demand Liquidity (ODL) payment corridors.

However, not all 1 billion released XRP enter market circulation. Ripple typically re-deposits 600 million to 800 million of the monthly released supply into new escrow contracts, extending the overall release schedule. Consequently, the net amount actually circulating after re-deposits has averaged only 200 million to 300 million XRP.

The monthly release schedule has been public for several years and is recognized as a factor already priced into the market. Past instances have not shown clear evidence that escrow releases triggered persistent price declines. Investors have tended to focus more on the amount re-deposited and the amount of XRP moving to exchanges rather than the release volume itself.

XRP surpassed $1.50 from approximately $1 in mid-August, at one point nearing $1.70, but at the time of this release, it traded sideways in the $1.36-$1.38 range. The price at the time of writing was $1.38, having fallen over 8% in the past week. The outlet predicted that if Ripple re-locks most of the released supply, as in the past, the actual increase in circulating supply will be limited.

*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.*