The start of 2026 marked an essential event in the Ripple ecosystem as Ripple executed an escrow release of 1 billion XRP on January 1. This significant event coincided with a precarious moment for XRP’s market performance, following a disappointing close in December 2025.
Typically, large escrow releases raise concerns regarding market pressure, but initial blockchain activity suggests that the usual patterns are emerging. A notable portion of the released XRP appears to be set aside for relocking, indicating a strategic approach from Ripple.
A Closer Look at the 1 Billion XRP Release
On January 1, data from the blockchain reveals that the escrow release was executed through three key transactions within a brief timeframe. The first transaction involved the unlocking of 300 million XRP, estimated at around $552 million. This amount was swiftly transferred to the Ripple wallet, identified as rMhkqz. Shortly thereafter, an additional 200 million XRP, valued at approximately $368 million, was moved to the same wallet, effectively boosting its holdings to 500 million XRP almost instantly.
The final phase of this release involved the transfer of 500 million XRP to a different wallet, r9NpyV, designated as Ripple’s second wallet. This substantial release added approximately $920 million more to the total. Collectively, these transactions accounted for the entire 1 billion XRP release, immediately affecting the circulating supply.
The timing of this release complicates XRP’s immediate market outlook. With December 2025 closing at a significant loss of 14.8%, the first negative close for the month since 2022, the influx of new tokens during such a downturn could lead to increased bearish sentiment, particularly among short-term investors tuned into supply dynamics.
Strategic Relocking: Ripple’s Adapted Approach
Ripple’s historical data indicates that between 70% and 80% of each monthly escrow release is typically reacquired to manage long-term supply stability. Early indicators suggest that Ripple is adhering to this practice. Within 24 hours of the initial unlocks, transaction data revealed a swift migration of tokens from the Ripple (9) wallet into new escrow arrangements, resulting in a significant portion of the released tokens being effectively removed from circulation.
Numerous tokens were being transferred out from both Ripple wallets simultaneously. At 17:17 UTC, a transaction locked away 500 million XRP into a new escrow at the Ripple (15) address, followed shortly by another at 17:21 UTC, which placed an additional 100 million XRP into the same escrow wallet.
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Simultaneously, an additional escrow creation was identified at 17:19 UTC, where 100 million XRP were secured from Ripple wallet (14). Collectively, these transactions demonstrated that a total of 700 million XRP had already been locked back into escrow.
The observed movement of escrow creation transactions alters the perception of a market dump. Instead of a full-scale sell-off, the data reveals a strategy of controlled relocking in line with Ripple’s historical escrow practices. The eventual price response of XRP will likely hinge less on the initial escrow release and more on how much of the remaining unlocked supply makes its way to exchanges.
