Ripple’s regular sales of XRP typically result in a decrease in the token’s value.
Ripple, the firm responsible for the XRP Ledger and the largest XRP holder, sold 150 million XRP from its reserves on July 9. This sale, worth about $64.5 million, is expected to impact the market sentiment and put pressure on XRP’s price.
July XRP Reserve Activity Breakdown
On July 1, Ripple released 1 billion XRP from its monthly escrow. Of these, 200 million XRP were transferred to Ripple’s treasury, and the remaining 800 million XRP were placed into new escrow accounts. Additionally, Ripple allocated an extra 100 million XRP to the sell-off reserves, totaling 300 million XRP available for sale.
Ripple’s usual method for selling XRP involves moving tokens from its treasury account, designated ‘Ripple (1),’ to an unlabeled account, ‘rP4X2hTa.’ This action increases the circulating supply by introducing previously uncirculated tokens. Currently, 100 million XRP remain in the ‘rP4X2hTa’ account, with 50 million already transferred to another intermediary account, ‘rhWt2bhR,’ before potentially being sent to centralized exchanges (CEXs).
Besides Ripple’s sales, recent whale activity could also affect market sentiment. On July 8, blockchain tracker WhaleAlert reported a large transfer of 35.35 million XRP, worth approximately $16 million, from a significant holder to the Bitstamp exchange.
🚨 35,350,000 #XRP (15,199,951 USD) transferred from unknown wallet to #Bitstamphttps://t.co/OiRM2CXz5t
— Whale Alert (@whale_alert) July 8, 2024
This transaction has fueled speculation about potential developments involving XRP whales, particularly in the context of the ongoing SEC case resolution.
Price Impact and Market Reactions
Ripple’s regular sales of XRP typically result in a decrease in the token’s value. This trend is noticeable as XRP frequently sees price declines following these sales. In 2024, only five out of 14 days of selling saw positive price movements, underscoring their substantial impact on the market.
In the first half of 2024, XRP has recorded negative performances for four out of the six months. Ripple has sold a total of 1.676 billion XRP this year, contributing to a 3.10% increase in the token’s overall supply. Currently, XRP is trading at $0.43, reflecting a 30% decrease year-to-date and a 17% decline since the significant sell-off observed on June 7.
Legal Battle and Market Sentiment
The ongoing legal battle between Ripple and the SEC remains a significant factor influencing market sentiment. In July 2023, a judge ruled that Ripple’s systematic sales of XRP did not breach the Howey Test but did find the company guilty of selling unregistered securities to institutional investors.
The pending decision will dictate the penalty, with the SEC advocating for a $2 billion fine and a ban on future institutional sales, while Ripple is proposing a $10 million penalty. Pro-crypto lawyer Fred Rispoli has speculated that the court’s final decision could come as soon as July 13 or by the end of the month. Rispoli predicts a penalty under $25 million with no disgorgement and suggests that the SEC might pursue further action if it believes Ripple continued violating securities laws post-complaint.
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