Token Unlock XRP: Ripple Releases 400 Million Coins to the Market, What Does This Mean for Investors?

Bittime - The latest news from the crypto world has shocked the market again with the release of 400 million XRP coins worth around $1.13 billion. What actually happened to XRP?

Does this mean the market will be flooded with XRP coins? Don't worry, let's review it together so that you understand more about this event!

What is XRP Unlock Token?

Token unlock is a process where a number of previously locked coins (in this case XRP) are finally released or unlocked and can be traded on the open market.

The company behind XRP, Ripple regularly holds unlock events, which are now part of their annual cycle. Even though it's 400 million XRP coins has been released, not all of them will immediately circulate on the market. Why is that?

XRP Locking and Selling Process

According to data reported by Whale Alert, most of this unlocked 400 million XRP will be re-locked in Ripple escrow wallets.

Based on historical records, Ripple only uses around 20% to 25% of the coins opened for sale to the market. The rest, yes, are locked back up and will wait to be released the following month.

Why is Ripple doing this? One of the goals is to look after XRP price stability so as not to be too affected by too many coins circulating at once.

If all unlocked coins are immediately sold, the market could be overwhelmed by a surge in supply which could lead to a sharp price drop.

What is the Impact for Investors?

For XRP investors, it is important to know that even if 400 million coins are released, not all of them will directly impact the price of XRP. This means there is no need to panic as most of these coins will be locked again.

However, what needs to be considered is the potential sale of some of the released coins. These sales can affect price volatility in the short term.

Controversy and Criticism of Ripple

Behind all the celebrations about the token unlock, there are also a number of criticisms that have emerged. One of them comes from ZachXBT, an onchain detective who is quite famous in the crypto world.

He revealed that several Ripple executives, including co-founder Chris Larsen, sold their XRP to crypto exchanges last January. The sale is estimated to be worth about $109 million.

This criticism arose because some parties thought that large-scale sales by Ripple executive could give the impression that they do not fully support XRP's long-term price increases.

Some people are worried that this could reduce investor confidence in Ripple and XRP itself.

What Should Investors Do?

For those of you who are diving into the world of crypto investment, stay calm and don't rush into making decisions based on one event like this token unlock. As explained, most of the released XRP will be re-locked and will not have a significant impact in the near future.

However, keep monitoring market developments and don't hesitate to do deeper research if you feel there is something that needs further attention.

Conclusion

This XRP unlock token may trigger various reactions, both positive and negative. What is clear, this is part of the process that Ripple has planned to manage the supply of XRP in the market.

As an investor, understanding these dynamics well is key to making wiser decisions when investing in the world of crypto. Always remember not to panic and make sure you have accurate information before taking the next step!

FAQ Ripple (XRP)

1. What is Ripple (XRP)?

Ripple is a technology company that is developing a global payment system using the digital currency XRP. XRP itself is a token used in the Ripple network to facilitate international transactions with low fees and fast processing times.

In contrast to Bitcoin or Ethereum, XRP is more focused on use in the banking and cross-border payment sectors.

2. Why does XRP have token unlock?

Token unlock is the process by which Ripple unlocks an amount of XRP that was previously locked in an escrow wallet. This is done to control the supply of coins circulating in the market and maintain price stability.

Even though XRP is released to the market, not all unlocked coins will be sold, most will be re-locked for market the following month.

3. Is XRP a good investment?

Like other crypto investments, XRP has high profit potential, but it also comes with big risks. The price of XRP can be very volatile, influenced by external factors such as regulations and major decisions from Ripple.

Before investing, it is important to do research and understand the dynamics of the ever-evolving crypto market.

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References:

• Bicoinsistemi news, 400 Million XRP Worth $1.13 Billion Unlocked: But There’s One Thing to Know, accessed on February 3, 2025

Author: Fkey