Ripple's XRP Escrow Activity Colors the Crypto Market This Month

On July 1, Ripple unlocked 500 million XRP tokens from its escrow, followed by another 500 million XRP unlocked on July 4, completing its monthly cycle of 1 billion XRP.
However, not all of the unlocked tokens were left circulating in the market. Out of the 1 billion XRP released, 700 million tokens were promptly re-locked in escrow, leaving 300 million tokens circulating for purposes such as On-Demand Liquidity (ODL) services, Exchange-Traded Products (ETPs), and infrastructure development.

This month's scheme slightly deviates from the usual pattern, as Ripple only re-locked around 100 million tokens from the second batch—raising some uncertainty about their supply management strategy, though the total re-locked amount still stands at 700 million tokens.

Analysis & Implications

Shift in Monthly Escrow Patterns

Since March, Ripple has gradually moved away from its traditional pattern of unlocking 1 billion XRP at once and re-locking the majority immediately. This time, they split the unlock into two phases and opted not to re-lock a larger portion of 300 million tokens, indicating an adjustment based on market demand.

Supply Dynamics & Utility

The decision to keep 300 million XRP circulating provides room for real-world utility—such as enhancing cross-border liquidity and supporting crypto infrastructure. This indicates that Ripple is shifting from a rigid calendar-based approach to a more dynamic strategy.

Price Volatility & Market Response

Escrow releases typically trigger short-term selling pressure. For instance, when the first 500 million tokens were unlocked, XRP temporarily dropped by 1.1% due to a lack of immediate demand to absorb the supply.

Ripple is adjusting its escrow tactics by unlocking and re-locking tokens dynamically—as shown by the 500 million XRP unlocked, with 100 million promptly re-locked, resulting in a total of 700 million XRP re-secured and 300 million tokens circulating for ecosystem functions. This strategy reflects a more responsive supply management approach aligned with market needs.