Ripple is set to release a total of 1 billion XRP from its escrow system on the XRP Ledger on January 1, 2025. This transaction, worth around $2 billion, could create a significant supply increase by adding to the existing 57.2 billion XRP.
The tokens will be released in three separate transactions: 200 million XRP, 300 million XRP, and 500 million XRP. These transactions will be made from Ripple (24) and Ripple (25) addresses. This release accounts for 2.63% of the total locked XRP supply. Ripple locked 55 billion XRP in the escrow system in 2017 to be released gradually. Although 1 billion XRP is expected to be released every month, Ripple usually tries to reduce the selling pressure on the market by re-locking some tokens. However, the release of 1 billion XRP creates uncertainty about whether demand will be able to absorb this amount.
Altcoin Season and Bitcoin Effect
Asset management firm VanEck says that the altcoin season may have already begun, and points to November 27, 2024 as the starting date. Altcoin season is defined by cryptocurrencies other than Bitcoin outperforming Bitcoin. The Altcoin Season Index is currently at 0.64, supporting the possibility of a strong altcoin season. However, according to CoinMarketCap data, the index shows that the altcoin season has not yet fully begun, with the current level at 49.
Crypto analysts predict that Bitcoin dominance will wane in the first quarter of 2025, with investors looking for more altcoin opportunities. Subsectors such as decentralized finance (DeFi), NFTs, and gaming tokens are expected to see significant gains during this period.
Ripple aims to position XRP as a liquidity tool in global payment systems, allowing for faster and lower-cost financial transactions. Some of the tokens released from the escrow system will be used to finance Ripple’s operations, establish new partnerships, and support ecosystem projects. However, this process carries the potential to create volatility in the XRP price.