Traders are bracing for a possible sell-off as Ripple unlocks another 1,000,000,000 XRP ($230M) from its escrow wallet. Although commonly unlocked at the start of the month, the practice has been the subject of persistent criticism every time it happens. The question still remains: why does Ripple need over $200M in funds every month?
Ripple always unlocks one billion XRP every month as part of standard procedure, as BeInCrypto reported in October, December, and January. These relentless unlocks and sell-offs by Ripple have caused some to provocatively compare Ripple to the PlusToken scam in how it offloads funds on the market.
It was reported by Whale Alert (@whale_alert) earlier today in two separate unlocks of 500M XRP each.
The reactions to the news were overwhelmingly negative. Many expect that the unlock will spur a major sell-off.
(@caspercrypto) March 1, 2020
Still, Ripple has failed to explain why it needs all these funds, every month, which often total more than $200M per month. In response, the team has simply asserted that it is the protocol and something that has been in place for some time. How these funds are spent is not always entirely clear.
At the time of writing, XRP is down 0.-72 percent against Bitcoin (BTC) on the daily. It has rebounded from its local low of $0.225, which it saw on February 27, and is currently trading at $0.235.
Two weeks ago, XRP suffered a flash crash to $0.15 on BitMEX, which angered many traders on the exchange. The surprise red wick caused mass liquidations on the exchange, but BitMEX has not committed to returning funds to those affected. The exchange’s CEO is on record for calling XRP ‘a turd,’ but listed it anyway, due to its high trading volume.