Insights into Ripple’s Escrow Strategy and Its Impact on XRP
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Understanding Ripple’s Escrow: A Stabilizing Force for XRP
Legal authority Bill Morgan has addressed allegations suggesting Ripple might eventually sell off its XRP escrow reserves. He clarified why this scenario is unlikely and highlighted the escrow strategy’s positive influence on XRP’s market value.
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How Ripple’s Escrow Supports XRP’s Market Stability
In a recent post on X, Bill Morgan emphasized that even the Securities and Exchange Commission (SEC) acknowledges Ripple’s escrow mechanism as a stabilizing factor for XRP’s price rather than a depreciative one. He pointed out that the SEC viewed this strategy as a factor that would encourage investors to anticipate profits from Ripple’s initiatives.
Morgan further dismantled the ‘dump theory’ surrounding Ripple’s escrow. His comments were in response to critiques from the crypto community who doubted the benefits of the escrow for XRP holders, speculating that Ripple would eventually offload its assets on investors.
Earlier, Morgan highlighted the consistent status of Ripple’s escrow since 2017. Initially, Ripple held 55 billion XRP in escrow, which now stands at 35 billion. Despite unlocking 1 billion XRP monthly, a significant portion is re-locked, preventing market saturation. These assets primarily support Ripple’s on-demand liquidity (ODL) services, maintaining demand and contributing to XRP’s price resilience. With Ripple’s expansion plans underway, the altcoin’s adoption is poised for further growth.
Examining the Origins of the Escrow ‘Dump Theory’
Addressing the accusations against Ripple, Bill Morgan suggested that certain crypto enthusiasts might be reacting out of frustration, having missed the recent XRP price surge. He speculated that this could be a reason for spreading Fear, Uncertainty, and Doubt (FUD). In a post, he queried a critic whether they had overlooked XRP when it was priced at $0.20.
In 2023, XRP prices hovered around this level, remaining largely in the $0.50 range throughout 2024. However, in the final quarter, XRP experienced a dramatic increase exceeding 500%, reaching a new all-time high (ATH) of $3.65. As of this writing, XRP is valued at approximately $3.50, showing a positive trend over the past 24 hours, according to CoinMarketCap data.
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