Revealing the Monthly Unlocking Mechanism: Is XRP Supply Being Diluted?
On December 1, Ripple will once again initiate its monthly routine of unlocking custody tokens, totaling 1 billion XRP. This batch accounts for 1.75% of the current XRP circulating supply and 2.61% of the funds held in custody by Ripple. The unlocking is divided into three transactions: 200 million, 300 million, and 500 million XRP, with a total value exceeding $1.6 billion.
However, looking back at Ripple's past operations, unlocking does not equate to immediate selling. Of the 1 billion XRP unlocked in November, 53% was re-locked in custody, significantly weakening the actual market circulation impact of the unlocked tokens. Notably, Ripple has set a new high in reserve re-lock volume over the past seven years, indicating its intention to manage liquidity in a planned manner.
Ripple's Sales Strategy: Risks and Opportunities Coexist?
Ripple sells XRP to customers with demand at market prices through its On-Demand Liquidity (ODL) platform, effectively avoiding the impact of traditional 'sell walls' on the market. So far this year, Ripple has sold 3.046 billion XRP, totaling over $5 billion. Paradoxically, this has not suppressed prices. On the contrary, the price of XRP has risen by 162% this year, with the current trading price at $1.66.
Does this indicate that market demand for XRP is outpacing the impact of supply expansion? Or can this pricing strength be sustained? It is necessary to pay attention to whether ODL demand can support market growth.
The Future of XRP: Three Key Points from Unlocking to Market Changes
1. Unlocking Rhythm and Ripple's Management Strategy
Although the monthly unlocking mechanism is viewed by many investors as a potential supply dilution risk, Ripple has shown its intention for long-term planning through multiple custody re-lock operations. The key lies in how Ripple will use this batch of unlocked tokens for ODL transactions and strategic distribution, rather than simple selling.
2. Will Ripple's Sales Path Bring a Stronger Demand Chain?
The promotion of ODL services has become a core pillar of the Ripple ecosystem, especially in emerging markets such as Southeast Asia and Latin America. ODL has driven improvements in payment efficiency and has become the underlying logic for the increase in XRP prices. If Ripple can expand this service to more regions, the supply expansion after unlocking may be absorbed by demand, potentially becoming a booster for price increases.
3. Dilution Risks That Investors Should Be Aware Of
Although Ripple claims to reduce market impact through the ODL mechanism, the growth of total market supply cannot be ignored. Over time, investors need to assess whether the unlocking amount may potentially impact long-term holding returns.
The True Meaning of Ripple Unlocking: How Should Investors Position Themselves?
The monthly unlocking of Ripple is closely linked to its global strategic layout. The current ODL model seems to relieve market pressure, but the key in the future still lies in how Ripple can enhance the demand driving force for XRP. Investors need to pay attention to the following three points:
The Actual Flow of Ripple's Unlocked Tokens - Sell Ratio vs. Custody Re-lock.
Growth Curve of ODL Transaction Volume and Its Correlation with XRP Prices.
The Impact of the Global Regulatory Environment on Ripple and XRP Liquidity Development, Particularly the Development of the SEC Lawsuit.
In the context of XRP having already increased significantly, Ripple's unlocking may act as a catalyst for short-term price fluctuations, while the long-term focus should be on the maturity of the ODL market and demand expansion capability. Opportunities and risks coexist, testing investors' judgment.
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