Ripple, the issuer of XRP, is set to release 1 billion tokens valued at $520 million on June 1. This common practice could potentially have a negative impact on the future price of XRP.
In the month of May, Ripple made some changes regarding the unlocking of tokens. Since 2017, they had been unlocking 1 billion tokens every month through escrows. However, in May, they replaced the old addresses with new ones, namely ‘Ripple (24)’ and ‘Ripple (25)’. These new addresses will continue to unlock 1 billion XRP each month until January 2025.
On May 1, Ripple unlocked 1 billion XRP from the new addresses. Out of these, 200 million tokens were sold to cover expenses, while the remaining 800 million tokens were re-locked until September 2027.
A total of 200 million XRP from ‘Ripple (24)’ was sent to the treasury address ‘Ripple (1)’. On May 13, Ripple sold 150 million XRP, which accounted for 75% of the allocated amount. The remaining 50 million XRP was sold on May 24, completing the monthly sales process.
The influx of such a large supply of tokens raises concerns about the impact it may have on the price of XRP. Historical data shows that XRP prices often decline during these sales periods. In 2024, only 5 out of 12 sales resulted in positive price movements, while the remaining seven days saw price drops. This makes the sales process closely monitored by investors.
In the first 5 months of 2024, XRP experienced negative price movements in the first 3 months. However, after the unlock of 1 billion XRP on May 1, the price remained relatively stable.
As of now, XRP is priced at $0.5174, experiencing a 0.73% drop in the last 24 hours. The market cap has fallen to $28 billion, and the 24-hour trading volume has decreased by 5% to $1.254 billion.
It is important to note that the information provided in this article should not be considered as investment advice. Investors should be aware of the high volatility and risk associated with cryptocurrencies and conduct their own research.
