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    Ripple News: 1B XRP Released, Market Reacts with Sharp Decline

    XRP News Ripple releases 1B tokens from escrow causing a 24.6 percent price drop as investors react to market uncertainty and volatility

    Updated Feb 03, 2025
    Irene Mukiri

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    Irene Mukiri

    Ripple News: 1B XRP Released, Market Reacts with Sharp Decline

    After its scheduled monthly release, Ripple unlocked 1 billion XRP tokens from its escrow accounts. The released tokens, worth approximately $3.10 billion, caused XRP’s price to drop by more than 24.6% within 24 hours. Market participants reacted strongly to the sudden influx, raising concerns over liquidity and price stability.

    Ripple Unlocks 1 Billion XRP from Escrow

    Ripple released 1 billion XRP from its escrow, with 500 million tokens coming from ‘Ripple (26)’ and another 500 million from ‘Ripple (27)’. The release occurred in two transactions—one for 400 million XRP and another for 100 million XRP. These accounts had never previously released tokens, making this event significant for XRP holders and the broader market.

    Despite the large unlock, XRP does not sell all released tokens simultaneously. The company plans to allocate only 20-25% for market sales, strategic partnerships, and institutional transactions. The remaining tokens will be returned to escrow to control supply and manage liquidity over time.

    Ripple’s escrow system has been in place since 2017 to regulate XRP circulation. The company releases 1 billion XRP every month while keeping most of it locked for future use. This mechanism helps Ripple manage market volatility while ensuring a steady and controlled supply.

    XRP Market Reacts to Token Release

    XRP’s price fell by over 24.6% in response to the token release, reflecting market fears of increased supply. A total of 400 million XRP, valued at approximately $1.136 billion, entered circulation as recently as yesterday. Investors reacted quickly, driving volatility and increasing trading volume across exchanges.

    Market sentiment turned bearish as traders anticipated more selling pressure from Ripple’s allocation of newly released tokens. The price drop highlighted concerns over Ripple’s escrow system and its impact on XRP’s long-term stability. However, Ripple’s structured release strategy aims to prevent excessive supply shocks in the market.

    Despite the decline, XRP remains one of the largest cryptocurrencies by market capitalization. The token has faced similar sell-offs in the past after monthly unlocks, with prices stabilizing over time. Ripple’s approach aims to balance supply and demand while ensuring liquidity for its ecosystem.

    XRP’s Escrow System and Market Control

    Ripple introduced its escrow system in 2017 to provide transparency and prevent excessive XRP flooding the market. At launch, the company initially held 80 billion XRP and designed a systematic release plan to control supply. This method helps XRP sustain its operations while managing liquidity effectively.

    In January, XRP retained approximately 300 million XRP for future distribution. The company follows a similar pattern each month, ensuring that only a fraction of released tokens enter circulation. By doing so, Ripple prevents sudden supply surges that could destabilize the market.

    The escrow system remains a key tool for Ripple’s long-term strategy. The controlled release allows the company to fund operations, support partnerships, and maintain market stability. The structured approach ensures XRP’s gradual and predictable distribution despite periodic price fluctuations.

    FAQs

    What is the impact of Ripple releasing 1 billion XRP tokens on the market?

    Ripple’s release of 1 billion XRP tokens caused a sharp price drop of 24.6% as investors reacted to the sudden influx.

    Why does Ripple release 1 billion XRP tokens every month?

    Ripple follows a monthly escrow release system to control liquidity and fund operations while gradually introducing XRP into circulation.

    How does Ripple manage XRP supply to prevent market crashes?

    XRP retains 75-80% of the unlocked tokens, re-locking them into escrow and selling only a portion to maintain liquidity.

    Irene Mukiri

    Irene Mukiri

    Editor

    Irene Mukiri, a crypto enthusiast and writer, embraces travel. As a digital nomad, she delves into the potential of blockchain technology, showcasing its capacity to unite and empower humanity in her writing.

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