XRP Price Crash 24.6% After Ripple Unlocks $1.1 Billion in Tokens

Ripple’s routine token release sends XRP price crashing, but the company’s unique unlock process helps manage market stability. The XRP market has declined by 24.6% in the last 24 hours alone.

In a shocking turn of events, the XRP market experienced a significant price drop after Ripple unlocked at least 400 million XRP tokens, valued at around $1.136 billion. This move is part of Ripple’s regular monthly token release from escrow, which aims to balance supply and support operations.

What’s Behind the XRP Price Crash?

The development was first brought to attention by Whale Alert, and the XRP market’s daily chart shows that investors quickly responded to the news. The price drop of 24.6% in the last 24 hours is a clear indication of the market’s sensitivity to large token releases. However, it’s essential to understand that not all the unlocked XRP tokens entered the market.

According to experts familiar with Ripple’s unlock process, the company generally uses only 20 to 25% of the tokens released during an unlock session. The remaining tokens are locked back in the custody account, which helps manage the supply and promote stability. This unique approach allows Ripple to sell a small portion of the unlocked XRP to institutions, exchanges, or for strategic partnerships, while extending the release schedule to future months.

Ripple’s Strategy to Manage Supply and Stability

Ripple’s regular XRP unlock process is designed to manage supply, promote stability, and fund operations. By selling only a small portion of the unlocked XRP and locking back the rest, the company aims to limit the impact of the unlock process on the market. This approach helps maintain long-term market stability, despite the short-term price reactions to large token releases.

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XRP Market Overview

The XRP market has experienced significant fluctuations this year, with a sharp growth of 45.01% between January 10 and 17. However, the market sharply plummeted on January 19 and has been declining since February 1, with a total decline of 26.15%. The current market price stands at $2.2409, after falling as low as $1.7752 earlier today.

In conclusion, Ripple’s regular XRP unlock process is a crucial aspect of the company’s strategy to manage supply and promote stability. While large token releases can trigger price reactions, the company’s controlled approach helps maintain long-term market stability.

XRP Price Plummets 24.6% After Ripple Unlocks $1.1 Billion in Tokens

Source: News | Coinpedia.org

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