Ripple unlocked 1,000,000,000 XRP from escrow, raise questions about performance
Recently, XRP – the world’s third-largest cryptocurrency just was unlocked more than $225M by Ripple, made the crypto community went berserk, and some Twitteratis jumped to conclusions and even used the dirty word “scam”.
XRP has underperformed in 2019
On December 1, the Twitter account “Whale Alert” that keeps a close eye on crypto transfers, posted that Ripple unlocked 1,000,000,000 XRP (about $225M) from its escrow wallet. This raising more questions about the performance XRP.
? ? ? ? ? ? ? ? ? ? 1,000,000,000 #XRP (225,092,032 USD) unlocked from escrow at Ripple Escrow wallet
— Whale Alert (@whale_alert) December 1, 2019
Ripple, as a centralized project, is often slammed due to it controls 55% of XRP’s total supply. In December 2017, the company announced unlocking 1 bln XRP from a series of its escrows on a monthly basis. It assures XRP holders that Ripple won’t sell all of its holdings on the open market simultaneously, which would ultimately crash the price of their native token.
During 2019, the token has underperformed, it is down around 40%, for comparison, Bitcoin is still up by more than 90% this year. Moreover, Ripple was deemed responsible for inflicting selling pressure on the third-biggest cryptocurrency, it is uncertain how many coins would be distributed or sold by the company through the latest unlocking of the scheduled escrow tranche releases 1 billion coins.
The sell-off may occur on OTC markets but in any case, there is a large supply of coins and small demand in addition to speculative trading and a limited number of trials by banks. However, at near rock-bottom prices, XRP attracted some buyers to hold the asset with hoping of bringing outlandish returns.
In the last sell-off, XRP downed to $0.21 and some analysts marked this as buying level. On the other hand, holding onto XRP may be counterproductive and expectations of outlandish gains may never materialize. It is still about 2 years for XRP to peak at prices above $3.40, a level never repeated in dollar or BTC terms. Waiting for a new hike to the price of a few dollars is considered an unreasonable investment strategy.
The opportunity cost of holding $XRP throughout 2019, hoping for insane targets brought to you by some crazy XRP maxis is nasty.
Don’t get blinded by those silly predictions and wake up. pic.twitter.com/TrefFovoBZ
— The Crypto Monk ⛩ (@thecryptomonk) November 30, 2019
Besides, BitLord – crypto influencer recent criticized Ripple for dumping tokens on their community to acquire real-life businesses.
Ripple denied these accusations
Brad Garlinghouse – Ripple CEO denied these accusations. Garlinghouse said that the company, as the biggest stakeholder, was the most interesting party in the success of its token. Additionally, he also explained that these sales were necessary for developing Ripple’s ecosystem.
Indeed, according to the company’s third-quarter report, it has planned to apply “a more conservative” approach to its monthly sales. For instance, in Q3, Ripple sold only $66.24 mln worth of XRP representing a 73.7 decrease compared to the previous quarter.
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