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Spark airdrop caused XRP price turbulence

Photo of: Nathan VDH
by Nathan VDH

The promise of free Spark tokens caused a bit of chaos. On December 12, the price of XRP fell sharply. The explanation? After this date and the intervention of Flare Network, many XRP holders were selling their tokens now that data for the airdrop was collected.

The argument that the tokens are free is one that is attracting attention. Several exchanges and wallets participated in a Flare Network airdrop on December 12. The future blockchain will distribute free Spark tokens.

However, these are intended for XRP holders. On December 12, Flare and its partners analyzed XRP accounts and addresses to determine which ones were eligible for Spark tokens.

Such an airdrop therefore gives rise to a certain opportunism. But the effects on the price of XRP are not insignificant either. Three weeks before this media event, the number of XRP whales had reached a record high.

According to Santiment, the number of XRP portfolios holding more than 10 million tokens, the equivalent of about $5.67 million, was 339. This is an all-time high. So these whales took advantage of the airdrop.

Before reselling their XRP? This is a plausible scenario according to several observers to explain the crash of the token price in the hours that followed. Once the eligibility window had passed, many XRP holders were selling their tokens.

The price of XRP lost 8%, while other cryptocurrencies such as Bitcoin and Ethereum were booming. According to Decrypt, however, the price recovered afterwards.

In the last few days, there has been some turbulence, however, for the Ripple token. A week earlier, Ripple’s former CTO, Jed McCaleb, received 266 million XRP. He sold 30 million XRPs to make $16.2 million.

However, Spark’s airdrop remains a success from the Flare Network’s perspective. The numbers are staggering. More than 110,000 accounts are eligible for Spark tokens, representing 23.5 billion XRP. Of these, 70% were on exchanges, led by Coinbase, and 30% were in self-custody.

And the airdrop was indeed generating an influx of new investors. Between December 9 and 11, 51,000 new XRP accounts were created. In addition, 694 million additional tokens were deposited at these addresses.