Ripple's 1 Billion XRP Unlock Fails to Crush Price as Institutional Demand Rises

Ripple unlocked 1 billion XRP on September 1, worth around $1.38 billion.

The move created a potential bearish catalyst, but XRP's price didn't crash. In fact, it traded near $1.42 five days later, only slightly higher than its pre-unlock price of $1.38.

So why didn't the price drop? One reason is that unlocking 1 billion XRP doesn't necessarily mean Ripple sold all those tokens. According to the company's escrow system, up to 1 billion XRP becomes available each month, but unused tokens can be placed back into new escrow contracts.

In this case, after the latest release, 700 million XRP was returned to escrow, leaving 300 million outside the newly created escrows. This means that not all of the unlocked XRP entered circulation immediately.

An additional reason for XRP's stability is its institutional demand, which has strengthened in recent months. On September 1, U.S. spot XRP ETFs attracted $14.38 million, continuing an 11-session inflow streak. This increased demand provides another source of buying power for XRP.

The XRPL AI payment activity also jumped 29%, and RippleX has discussed XRP collateral as a potential institutional use case, indicating that the XRP ecosystem is evolving.