Ripple, the company behind the XRP Ledger, will unlock 1 billion XRP tokens worth $470 million on July 1. This move is part of Ripple's monthly sell-offs and could negatively affect XRP's price in the coming weeks.
Historical Context
Since 2017, Ripple has been unlocking 1 billion tokens every month through escrows. As of May 2024, the company uses 'Ripple (24)' and 'Ripple (25)' wallets to manage these escrows, which will continue until January 2025. On July 1, 'Ripple (24)' will unlock 500 million XRP in two escrows (100 million and 400 million), while 'Ripple (25)' will unlock a single escrow of 500 million tokens.
June Unlock Analysis
On June 1, Ripple unlocked 1 billion XRP from 'Ripple (24)' and 'Ripple (25)' accounts. The company reserved 200 million tokens for sell-off and re-locked the rest until September 2027. Ripple added 200 million extra XRP for the sell-off, resulting in the largest monthly dump in its history. By June 20, Ripple had sold the entire 400 million XRP reserved for that month.
XRP Price Impact
Ripple's sales have historically impacted XRP's price due to the supply pressure on the market. In 2024, only five out of 14 sell-off days saw positive price action. Most of the time, XRP experienced local crashes following Ripple's token sales. Additionally, XRP had a negative monthly performance in four of the first six months of 2024. The price action has been notably negative since the June 1 unlock.
Conclusion
The upcoming 1 billion XRP unlock on July 1 could continue this trend of price pressure on XRP. Investors should monitor Ripple's activities closely as these sell-offs typically lead to significant market impacts.