Ripple Unlocks 1 Billion XRP, But Will It Crash Market?
Ripple is set to unlock 1 billion XRP from its escrow wallet on September 1, sparking fears of a major sell-off in the cryptocurrency's price. However, according to crypto trader Kamilah Stevenson, it's unlikely that all 1 billion XRP will enter circulation at once.
The key question is whether this additional supply of XRP could crash its price. To understand the situation, let's take a look at Ripple's escrow system created in 2017. The company locked 55 billion XRP in 55 separate escrow contracts, with each holding 1 billion XRP.
However, Ripple does not simply sell the full 1 billion XRP after each unlock. In fact, most of the unlocked tokens are usually locked back into escrow within hours. This means that only a small portion of the unlocked XRP actually enters circulation.
According to Stevenson, 'Available is not the same as sold.' She explains that while 800 million to 900 million XRP may be moved back into new escrow contracts, the remaining 200 million to 100 million XRP can be used for business needs. This includes providing liquidity for cross-border transactions through Ripple Payments or supporting new lending projects with Clearpool and Cicada Partners.