The XRP issuer injected XRP 1 billion into its escrow account, causing the value of the token to fall back, but only briefly.
April is undoubtedly the month of rebirth for XRP. XRP rose more than 310% in 2 weeks, stealing the show from Bitcoin and ETH. And the token has maintained this momentum ever since.
Enough to justify the injection of additional liquidity into the market? Unlike other cryptos, Ripple controls the floodgates. The company holds 55% of the supply in an escrow account.
Now, as Whale Alert notes, the blockchain company has released 1 billion XRP, the equivalent of $1.6 billion at the time. This transaction resulted in a decline in the price of the asset.
However, since then, the price has returned to growth. On May 2 at 3:30 pm, the XRP was quoted at $1.58, up slightly by 1.5%. Is this enough to ease investors’ grievances with Ripple Labs?
This policy isn’t new though. As far back as 2017, the company announced its intention to dip into its account over the next 55 months in order to control the token’s price. These operations work both ways, however.
Indeed, Decrypt reports that Ripple is also making XRP redemptions, which are then returned to the escrow account. In March, 90% or 900 million tokens, returned to its accounts, thus reducing the supply.
This control exercised by Ripple, however, is not without criticism and even accusations of price manipulation. The stock market regulator, the SEC, is actually suing the company.
The formalization of these lawsuits triggered a real fall of the XRP. Because of the legal risk, many exchanges decided to withdraw the token from their platforms in the United States. As a result, on January 1, XRP was down to $0.23.
It has since recovered. In early April, Ripple scored another victory against the SEC. The native token of the payment platform jumped by 30% and was close to 1.30 dollars. On May 2, it flirted with the $1.60 mark. XRP is now the 4th largest cryptocurrency.