The Long-Running Debate About XRP's Escrow and Its Influence on the Market Has Picked Up Steam Lately

This rise challenges the escrow dump theory, which claims that Ripple's monthly escrow releases cause the market's volatility.

The long-running debate about XRP’s escrow and its influence on the market has picked up steam lately because of crypto lawyer Bill Morgan’s comments on social media.

The discussion was about the role of Ripple’s escrow in the price of XRP after the digital asset’s price rose from $0.50 to over $3.00 even though releases from escrow continued in late 2024 and early 2025.

This rise challenges the “escrow dump” theory, which claims that Ripple’s monthly escrow releases cause the market’s volatility.

Bill Morgan took on the misconception in a post, pointing out that the monthly XRP released from escrow is a small percentage of the overall daily trading volume. As the total XRP supply increases, the relative rate of XRP held in escrow keeps going down.

According to Morgan, even if the volume of XRP released from escrow stayed the same while the total supply grew, the market’s response would not match claims of an “escrow dump.”

He stressed that the escrow releases, which make up a decreasing percentage of XRP’s total supply, do not have the harmful effect that critics suggest.

The larger point made by Morgan was that the narrative surrounding the “escrow dump” theory was not only flawed but also not supported by the market’s actual behavior.

He highlighted how, even as Ripple continues to release XRP from escrow, the asset’s price rose, showing that the issue lay elsewhere if price declines were to happen in the future.

This debate comes as Ripple’s legal fight continues. The firm has faced scrutiny from the U.S. Securities and Exchange Commission (SEC), which has argued that Ripple’s escrow program is a major factor in influencing XRP’s price.

However, in November 2024, Morgan explained that Ripple’s share of XRP holdings had decreased from 55% in 2020 to below 39%. This change demonstrates Ripple’s decreasing control over the asset, further challenging the notion that the company’s escrow releases are a major factor in XRP’s price movements.

The conversation around XRP also includes a comparison to Bitcoin regarding market price movements.

While Bitcoin has seen growth with institutional involvement and more adoption, XRP’s price trend has not mirrored the same success.

As DefiBanked.sol, a notable crypto commentator, highlighted, XRP’s price has been relatively stagnant, with fluctuations only occurring when external factors, such as political statements, reignite interest in the asset.

The crypto community remains divided, with some defending XRP’s claimed use cases, while others criticize its lack of real utility outside of speculative predictions and corporate partnerships.