Ripple Unlocks 1 Billion XRP from Escrow, Market Reacts with 24.6% Price Drop

After its scheduled monthly release, Ripple unlocked 1 billion XRP tokens from its escrow accounts. The released tokens, worth approximately $3.10 billion

After its scheduled monthly release, Ripple unlocked 1 billion XRP tokens from its escrow accounts. The released tokens, valued at 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.

On March 14, 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’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.

FAQs

What caused the recent drop in XRP’s price?

After its scheduled monthly release, Ripple unlocked 1 billion XRP tokens from its escrow accounts. The released tokens, valued at approximately $3.10 billion, caused XRP’s price to drop by more than 24.6% within 24 hours.

How does Ripple’s escrow system work?

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.

Does Ripple sell all the XRP tokens it unlocks?

No, XRP retains 75-80% of the unlocked tokens, re-locking them into escrow and selling only a portion to maintain liquidity.