We have left behind a year full of challenges and sensational events in the cryptocurrency market. One of the most discussed and followed topics of 2022 was the case of Ripple and the SEC. Therefore, Ripple has always remained in the limelight of the market. However, with the effect of the lawsuit, the low price of XRP disturbed the community. Ripple CTO David Schwartz explained his views on the reason why the XRP price is low. Meanwhile, a huge amount of XRP has been unlocked from relics.
1 billion XRP from trusts un-locked, where are the tokens going?
On the first day of the new year, exactly 1 billion XRP tokens were unlocked from escrow accounts. Such events are considered commonplace and commonplace for many in the XRP community. However, this time there were surprises. Because, previously, XRPs were mined directly from Ripple escrows. However, this time it happened on unknown accounts, according to Whale Alert.
However, Bithomp identifies these addresses as Ripple’s, each of which currently holds 1 billion XRP. The same un-locked tokens are still in wallets today. That is, it has not yet gone to exchanges or other ODL sites.
Why so much fanfare about Ripple’s XRP escrows?
cryptocoin.com As followers of Ripple know, every month Ripple unlocks XRP from its relics. Thus, the token aims to bring predictability to the XRP offering when used directly in the company’s transactions. Initially, 55% of the 100 billion XRP supply was locked in such accounts. Now this rate has dropped to 42.7%.
Meanwhile, most of the XRP tokens are currently on the market. At the same time, only 184 million tokens remain on the market, on average, out of the 1 billion XRP that enters the market monthly from escrow, according to XRPArcade. Overall, it recorded a total of $718 million in net sales, according to Ripple’s last two quarterly reports. Therefore, there is an upward trend in the amount of XRP available in the market.
This is why the XRP price is so low, according to Ripple CTO!
David Schwartz tries to provide an explanation for the sluggish performance of XRP and other major cryptocurrencies. According to Schwartz, this is due to uncertainty about whether crypto will be the next big thing. Ripple CTO cites Google in 2000 as an example. He points out how skeptical people were back then that a search engine would be worth billions of dollars. However, he stresses that some have become true believers and make millions. Accordingly, he argues that crypto is currently in a similar state.
Ultimately, whether more people are convinced of crypto’s future potential affects investor sentiment. As this sensitivity increases or decreases, prices often move in parallel with it. In other words, “markets are still trying to figure out if cryptocurrency is the next big thing.”
Therefore, the industry needs to focus on real use cases if it is to make progress in adoption. It also needs to convince people of the potential of crypto by providing enough scalability. Thus, it is possible that it will increase the odds of success in the adoption of different crypto technologies. However, Schwartz underlines that this claim is just his personal opinion, which is not supported by facts and data. Therefore, he says it’s pretty normal for people to disagree with him.