Disclaimer: The opinions expressed by our writers are their own and do not represent the views of U.Today. The financial and market information provided on U.Today is intended for informational purposes only. U.Today is not responsible for any financial losses incurred when trading cryptocurrencies. Do your own research by contacting a financial expert before making any investment decisions. We believe that all content is accurate as of the date of publication, however certain offers mentioned may no longer be available.
A whale transaction involving 400 million XRP, worth approximately $213.9 million, was opened from an escrow wallet.
Based on Pope’s Warning, 400 million processed on the Ripple blockchain was between two unknown wallets. This transaction created a buzz in some XRP communities. Some see this as a dump, while others see it as a signal of inflation to come.
“Locking” and “unlocking” Ripple escrow
As per data shared by Whale Alert, the transaction is subject to a nominal fee of 0.0001 XRP. Ripple’s 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 made the move 800 million XRP into escrow wallets to rebalance the circulating digital currency supply in three stages. The lockdown did not result in a recovery of losses incurred in the previous week.
Ripple’s escrow typically unlocks around 1 billion XRP each month, with an unspent portion returned to escrow. The opening of 400 million XRP sparked speculation regarding the trajectory of the XRP market in the coming days.
Market response to the opening of 400 million XRP
Despite the large opening, the XRP market reaction was relatively calm. Although large unlocks may cause volatility due to increased liquidity and potential market speculation, at the time of writing, the price of XRP as shown on CoinMarketCap revealed XRP was up 1.93% at $0.5303.
Although the unlocking of 400 million XRP did not cause significant market volatility, industry observers advise investors to continue monitoring Ripple’s escrow activity and its potential impact on the broader cryptocurrency market.
The ongoing legal battle that Ripple is facing with the US Securities and Exchange Commission (SEC) continues to trail the exchange. Ripple recently filed an important reply to SEC remedial briefing in April where regulatory authorities requested disgorgement of profits earned from the sale of XRP and civil fines.