Ripple unlocks $1.6 billion in XRP as token continues to drop in value

In an ongoing series of token releases, Ripple (XRP) recently unlocked 1 billion tokens totaling approximately $1.6 billion from escrow on February 1st, maintaining its monthly distribution schedule. This comes after the cryptocurrency experienced a decrease of over 10% in January, further extending its losses into the new month.

The releases were completed in four individual transactions, with 100 million, 400 million, 100 million, and 400 million XRP tokens being unlocked. Ripple implemented a supply management system in 2017 that involved placing 55 billion XRP in escrow, allowing for the monthly release of up to 1 billion tokens. Following each release, the company typically relocks a substantial portion of the tokens, varying between 60% and 80%, and retains the rest for operational and liquidity purposes.

Whale Alert, a platform dedicated to tracking large cryptocurrency transactions, reported that Ripple relocked a total of 700 million XRP in two transactions valued at approximately $1.09 billion combined. This left a net of 300 million XRP unlocked, coinciding with XRP’s decline of more than 6% during the first two days of February, with the token trading at $1.57 at the time of reporting.

Despite the ongoing token releases and market performance, analysts remain divided on the future trajectory of XRP. While one analyst believes that XRP is adhering to familiar long-term cycles and anticipates a significant rally possibly not occurring until Q4 2028, with price projections ranging from $8 to $10, David Schwartz, a principal architect of the XRP Ledger, presented a more cautious viewpoint.

Schwartz emphasized that if rational investors truly believed in XRP’s potential to reach $100 within a few years with a 10% probability, its current trading value would reflect this confidence. The fact that XRP is trading well below $10 suggests a lack of conviction among investors regarding its ability to achieve such high price targets within a short timeframe.

In a related development, an observation was made about two Ethereum whales who recently sold off $371 million worth of Ethereum to repay loans taken through the Aave lending platform, indicating potential market movements and trends in the broader cryptocurrency landscape.

In conclusion, Ripple’s ongoing token unlocks and subsequent market performance continue to generate diverse opinions among analysts and industry experts, reflecting the uncertainties and complexities inherent in the cryptocurrency market at large.