Last week, Ripple automatically released $3.28 billion in XRP tokens from Escrow, causing fear of selling. However, these fears were completely irrational and the whales had the opportunity to consolidate their holdings.
None of the reasons why XRP is feared for long-term health has been tested. The escrow feature has been working for years and is intended to stabilize the token market. The XRP has already been returned.
XRP Escrow’s big failure explained
On the surface, Ripple should be having a great moment right now. Although they lost cross appeal in the famous SEC incident, the committee has since admitted its biggest demand.
This encouraged extra inflows and price increases, but it was a hit. Two days ago, Ripple unlocked the $3.28 billion XRP held in escrow, causing bearish feelings.
Bill Morgan, a lawyer and well-known crypto analyst, explained why this shouldn’t have a long-term price impact.
Essentially, the community was afraid that Ripple would release this XRP from Escrow for a massive sale. Therefore, the story progressed. It is essential to throw away your tokens as soon as possible to avoid losing. However, this makes no sense for a number of reasons.
For one thing, Ripple CEO Brad Garlinghouse approved the XRP escrow mechanism more than seven years ago. The system is intended to ensure predictable supply and stable markets. The SEC even praised the achievements.
By leaving these tokens locked, Ripple maintains additional tools to avoid disastrous economic situations.
Apparently so It’s strange to abandon that plan completely while Ripple is doing well. Even if Garlinghouse was intentionally spiked on a successful program, now is a strange time to do it.
Additionally, similar XRP escrow unlocking often occurs Automatically at a specified time. Since rumors began to flow, Ripple has returned these tokens to his escrow account.
In other words, this escrow fiasco did not affect XRP’s price in the long run. Some traders may have pushed this story to buy a premium token.
But the whole thing seems to be a social media spectacle. Traders should be aware that they believe exaggerated claims and unverified information, especially when demanding immediate action.
The whale buys XRP as Escrow unlock rumors first appeared in FUD.
