On October 1, Ripple made headlines by releasing an impressive 1 billion XRP tokens from its escrow system. However, in a move signaling caution and foresight, the company swiftly returned a massive 800 million XRP, constituting 80% of the unlocked amount, to its escrow in new contracts slated to conclude by 2027.
Despite the sizable unlock, the CoinMarketCap index’s report on XRP’s circulating supply remained static at 53.312 billion. This constancy stems from Ripple’s approach: tokens unlocked aren’t categorized as ‘circulating’ until expended or sold. Historically, Ripple tends to sell a majority of the tokens that aren’t re-locked each month.
Ripple’s Escrow System: Ensuring Predictability
Ripple‘s escrow mechanism stands as a testament to the company’s commitment to stabilizing the XRP market. The system’s primary objective is to guarantee a steady, controlled XRP distribution. Ripple’s strategy, in place for a while, pledges the monthly release of 1 billion XRP from an initial commitment of 55 billion, spanning 55 months.
Post the monthly release, a consistent pattern emerges. Approximately 800 million XRP are sent back to the escrow system, ensuring market stability, while around 200 million are added to the circulating supply.
Ripple unlocked 1 billion XRP tokens from its escrow system this month, but immediately re-locked 800 million XRP
Evaluating XRP’s Price Trends
Historical data paints October, affectionately termed “uptober,” as a favorable month for most cryptocurrencies, Bitcoin included. With a favorable track record since 2013, XRP’s prospects for October remain optimistic.
Currently, XRP has witnessed a minor surge to $0.537. A critical resistance awaits at $0.55, aligned with the daily MA 200. If overcome, XRP might rally towards the sought-after $0.67 mark. Conversely, a robust support base is emerging around $0.50, acting as a bulwark against potential declines.
Conclusion
Ripple’s strategic decisions, particularly the prompt return of 800 million XRP to escrow, underline its dedication to balancing growth with market stability. As XRP charts its path in the unpredictable cryptocurrency landscape, such calculated choices will undoubtedly influence its trajectory.