Parent company Ripple had unlocked one billion XRP cryptocurrency from its escrow wallet. That one billion that was unlocked ended up going right back into escrow, which created a lot of uncertainty in the XRP community.
XRP Rallies After Escrow Activity
Although XRP cryptocurrency remains on the third-largest spot in terms of market capitalization, the cryptocurrency is still down nearly -40% over the last year. Despite a lot of controversy over the recent escrow activity, XRP started rallying overnight following the activity of one billion XRP being unlocked and returned to it’s escrow wallet. Over the last 24hr, XRP has surged +1.30% as investors are waiting to see if it can sustain any sort of upward momentum.
XRP Escrow Uncertainty
There was a lot of “FUD” revolving around the escrow activity. After everything is said and done, it appears that nobody really knows the true reasoning behind the activity. It’s hard to assess whether the activity is bullish or bearish. Arguments from both sides can be justified, which makes it so difficult to piece together. On a positive note, the return of one billion XRP to escrow could be signaling that financial institutions will have to acquire XRP from it’s current circulating supply. This means with OTC sales not taking place, institutions might have to access exchanges directly to purchase XRP. This could ultimately have a positive impact on price.
On the flip side, you could argue that institutional “demand” for XRP has dried up, resulting in the return of one billion to escrow. This is also hard to justify, but the Q4 report from Ripple just got a lot more interesting… It’s hard to believe that institutional demand completely dried up. With all the recent activity circulating around Swell and MoneyGram, one could argue more demand should be pouring in. Historically speaking, Ripple has used around 100M-400M / month. This has just gone to 0 which raises a lot of questions.
In essence, Ripple in December 2017 announced that it will unlock 55 billion XRP into an escrow wallet, from which 1 billion XRP will be released every month in a bid to accelerate the XRP ecosystem. However, Ripple earlier elaborated that the unspent XRP token will be transferred back to a new Escrow account.
XRP Price History
XRP has witnessed the unpredictable moment, it was once priced above $3.40 and is currently down to $0.21. The token has been flowing in a steep decline for a year, however, the community appears with the bullish view when it jumped over $0.47 this year but it failed to resist and maintain momentum. In fact, the yearly conference of Ripple, Swell didn’t create any price catalysts – instead of rising up, the value fell by more than 16% at that point.
Furthermore, the data provided by CoinMetrics in May 2019 reveals that the data provided for Ripple’s escrow system differ from the actual data provided on the XRP ledger. CoinMetrics had also revealed that 55 million XRP has been released from an unknown escrow wallet which has apparently no connection to the main Ripple escrow account.
Image Source – Shutterstock
Notice: Information contained herein is not and should not be construed as an offer, solicitation, or recommendation to buy or sell securities. The information has been obtained from sources we believe to be reliable; however no guarantee is made or implied with respect to its accuracy, timeliness, or completeness. Authors may own the crypto currency they discuss. The information and content are subject to change without notice. Visionary Financial and its affiliates do not provide investment, tax, legal or accounting advice. This material has been prepared for informational purposes only and is the opinion of the author, and is not intended to provide, and should not be relied on for, investment, tax, legal, accounting advice. You should consult your own investment, tax, legal and accounting advisors before engaging in any transaction. All content published by Visionary Financial is not an endorsement whatsoever. Visionary Financial was not compensated to submit this article Please also visit our Privacy policy; disclaimer; and terms and conditions page for further information.