Ripple’s native XRP has recently been on an upwards trajectory. Currently trading at $0.50 XRP is up 12.97% over the week. In the meantime, XRP has emerged as the 6th largest gainer among the top 100 cryptocurrencies by market cap.
It is clear that the recent release of 1 billion tokes has little to with token’s behavior. Rather, it is driven by a positive sentiment about XRP that is prevailing in the market, thanks to the SEC-Ripple lawsuit.
Why Does Ripple Releases a Billion XRP Tokens Every Month?
Ripple releases 1 billion XRP tokens every month to ensure a steady supply of XRP into the market. Release of 1 billion XRPs makes the token more accessible to the potential buyers and it also prevents XRP from getting too volatile.
— Whale Alert (@whale_alert) June 1, 2023
Ripple has stated that it will continue to release 1 billion XRP tokens every month until all of the XRP tokens in escrow have been released, which is expected to happen in the summer of 2026. Ripple had locked 55 billion XRP tokes into escrows in December 2017 and since that the firm has been releasing 1 billion tokens every month. If Ripple continues to release 1 billion XRPs each month it would take 55 months for Ripple to systematically release all the held tokens.
Some people have criticized Ripple’s decision to release so much XRP into the market, arguing that it could lead to a decrease in the price of XRP. However, Ripple has defended its decision, arguing that it is necessary to ensure the long-term health of the XRP ecosystem. Further, the rate at which XRP tokens are released it is highly unlikely that it would have effect, if any, on token’s price.