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A whale transaction involving 400 million XRP, worth approximately $213.9 million, was unlocked from an escrow wallet.
According to Whale Alert, the 400 million processed on the Ripple blockchain is between two unknown wallets. The transaction is creating a buzz in some quarters of the XRP community. Some consider this a dump while others see it as a signal of incoming inflation.
Ripple’s “lock” and “unlock” of escrow
As per the data shared by Whale Alert, the transaction had a nominal fee of 0.0001 XRP. The Ripple escrow system launched in December 2017, is a way to ensure predictability and stability of the XRP market while providing liquidity.
On Friday, May 3, Ripple Labs shifted 800 million XRP into an escrow wallet to rebalance the circulating supply of the digital currency in three tranches. The lock-up did not result in the recovery of losses incurred in the previous week.
Ripple’s escrows typically unlock approximately 1 billion XRP each month, with any unspent portion returned to escrow. The unlocking of 400 million XRP is sparking speculation as to the XRP market trajectory in the coming days.
Market response to 400 million XRP unlock
Despite the sizable 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 XRP price as shown on CoinMarketCap reveals that XRP is up 1.93% at $0.5303.
While the 400 million XRP unlock did not cause significant market turmoil, industry watchers advise investors to keep monitoring Ripple’s escrow activity and its potential impact on the broader cryptocurrency market.
The ongoing legal battles Ripple faces with the U.S. Securities and Exchange Commission (SEC) continues to trail the exchange. Ripple recently filed a crucial reply to the SEC’s remedies briefing in April where the regulatory authority sought disgorgement of profits derived from XRP sales and civil penalties.
