Ripple unlocks 1 billion XRP every single month to fund its operations. On January 1st, the market will witness 2025’s first token unlock event, but it is a matter of concern for some, as the Ripple token is performing significantly well on the charts. Let’s see how the XRP price will react to these Billions worth of XRP unlocks.
Will Ripple’s Token Unlock Affect XRP Price?
Ripple has locked 55B XRP tokens, which is nearly 55% of the total XRP supply, in an escrow account. Out of which, it unlocks a 1B supply on the first of every month. Although the amount is enough to affect the Ripple token price heavily, it doesn’t, and the same will happen at the upcoming Ripple unlock event. This is because the unlocks are made to provide liquidity to exchanges and partners, not to sell or buy. This way, these unlocked XRP do not enter the market directly, leaving the XRP price unaffected.
This also gets clear with the December unlocks, which became the biggest Ripple’s XRP sell-off. Still, the price stayed at around $1.8 and even surged the next day under the influence of many bullish factors, including the RLUSD stablecoin launch. On January 1, 2024, Ripple will unlock 1B XRP in three transactions, 200M XRP, 300M XRP, and 500M XRP, which is nearly 1.75% of the XRP’s total circulating supply.
This will happen with two main escrow wallet addresses, as Ripple (24) will be responsible for 200M & 300M XRP unlocks, which were locked in December 2020 and January 2021. Additionally, the second account, Ripple (25), will unlock the 500M tokens, locked in 2021.
Ripple unlocks these tokens to fund operations, develop the ecosystem, and provide liquidity. Even in this 1B count, they re-lock a portion of the tokens, which reduces the impact of the selling pressure on Ripple price. Interestingly, these Ripple unlocks are similar to the Stablecoin print, which does not affect the market much, or if they do, it’s almost unnoticed.
What’s Coming Next, XRP Price to Hit $10?
Amid the increased selling pressure, the XRP price entered a downtrend, losing 7% of its value over the week. It currently trades at $2.18, with a 10% drop in trading volume ($4.72B), which indicates that investors are moving away from the token. However, the 56% rally and 250% over the month and year is persistent, which shows its impressive performance, lifting it from years-long consolidation.
Interestingly, its 450% surge between November 3 and December 3 formed a bull flag setup, as the token consolidated right after that. With that, the recent CoinGape report revealed that any addition to the flagpole height could lead to the XRP hitting new ATH. However, Bitcoin price performance also plays an important role in this. If the price slips below $90k, it could introduce a bear market, impacting the Ripple token price negatively and pushing it down to $1.5 or lower.
Outcome of Future XRP Unlock on Ripple Token
With Ripple’s plan to unlock 55B XRP over 55 months, the digital network wishes to bring funds for operations and development. More importantly, it provides liquidity to the exchanges to maintain the trading of XRP tokens. Overall, these ‘token unlocks’ take place every first of every month. More importantly, these rarely impact the XRP price, as these unlocked tokens are not for trades. Analysts even compared the XRP unlocks to Stablecoin print but with much more stability. With this factor getting out of the picture, the XRP’s target of $10 remains the same under the Bitcoin price influence.
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