Ripple, a major participant in the cryptocurrency industry, has been under scrutiny for its significant sales of XRP. David Schwartz, Ripple CTO, recently addressed these concerns and shed light on the rationale behind the sales.
Schwartz acknowledges that Ripple holds the largest amount of XRP compared to any other entity. Given this vast holding, selling XRP becomes a necessity to fund its ongoing operations and developments. Holding the whopping XRP indefinitely wouldn’t be a practical approach for Ripple’s financial sustainability.
When asked why Ripple is the biggest seller of XRP, Schwartz said, “Because Ripple has the most XRP and, in practice, the only realistic alternative to selling it is continuing to hold the most XRP indefinitely.“
Read Also: 800 Million XRP Returned To Escrow As Ripple Confirms Number of Months Left For Escrow Releases
Ripple maintains transparency regarding its XRP holdings through quarterly reports. The Q1 2024 report provides a breakdown of these holdings, categorized into two primary groups. The first category encompasses XRP readily available in Ripple’s wallets, while the second includes XRP locked in on-ledger escrow accounts.
These escrow accounts are designed to release XRP in a controlled manner over the next four years. Ripple cannot access the escrowed XRP until the predetermined schedule releases it.
The report further clarifies that a significant portion of the monthly released XRP is returned to the escrow accounts, signifying a measured approach to distributing the tokens. As of March 31, 2024, Ripple directly held 4.8 billion XRP, with an additional 40.1 billion XRP secured in on-ledger escrow accounts.
Read Also: Ripple CTO Reveals His Millions of XRP Holdings and Investment Strategy
Currently, XRP is trading at around $0.53 per token. Looking at historical price charts, XRP has demonstrated an upward trend since May 2023. The token’s current resistance level sits at $0.80, indicating a potential ceiling for the short-term price movement. However, XRP is also nearing a support level where it has remained for the past month, following a price decline of 22% in mid-April.
The ongoing sales of XRP by Ripple is a strategic decision to ensure the company’s financial health and fuel its development initiatives. Transparency regarding these sales and the categorization of XRP holdings are crucial aspects of Ripple’s approach.
It remains to be seen how these sales will influence the long-term price trajectory of XRP, but market indicators suggest a period of potential consolidation after a period of growth.
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