In recent discussions surrounding Ripple’s strategies, legal authority Bill Morgan has tackled the persistent rumors that the company would eventually liquidate its XRP escrow holdings. He provided an insightful perspective on why such actions are unlikely and how the escrow arrangement positively impacts the price of XRP.
Ripple’s Escrow: A Stabilizing Force for XRP
In a recent social media update, Morgan emphasized that even the Securities and Exchange Commission (SEC) acknowledges that Ripple’s escrow system is designed to support the XRP price rather than undermine it. He pointed out that this arrangement instills a sense of confidence among investors regarding future profits stemming from Ripple’s operations.
Furthermore, Morgan refuted the so-called ‘dump theory’ regarding Ripple’s escrow holdings in reaction to a comment from a fellow crypto enthusiast who expressed skepticism about the escrow being beneficial for XRP holders. The critic speculated that Ripple may eventually unload these holdings on them.
Earlier, Morgan had pointed out the minimal difference in Ripple’s escrow holdings between 2017 and the present. He revealed that Ripple held 55 billion XRP in escrow back in late 2017, while it currently retains about 35 billion XRP. The company releases 1 billion XRP monthly, suggesting that there should have been a much more substantial decline in escrowed assets since 2017.
Interestingly, Ripple often re-locks a considerable portion of the released coins each month, preventing a market influx. This strategy serves a dual purpose, as the released coins are utilized for the company’s on-demand liquidity (ODL) services, creating demand that helps sustain and potentially enhance the XRP price. Additionally, Ripple continues to pursue expansion efforts, likely furthering the adoption of this altcoin.
Understanding the “Dump Theory” Critique
In addressing the concerns surrounding Ripple, Morgan posited that many skeptics in the crypto community may simply feel left out from the recent upward movement of XRP’s value. He suggested this might be their motivation for spreading Fear, Uncertainty, and Doubt (FUD). In a recent post, he quipped to a critic about whether they missed the opportunity to invest in XRP when it traded around $0.20.
Indeed, XRP lingered around this price around early 2023 before experiencing a phenomenal surge later in the year, witnessing an astonishing rise of over 500%. Earlier this week, it reached a historic peak (ATH) of $3.65.
As of now, XRP is trading near $3.50, reflecting a positive trend over the past day, based on up-to-date statistics from CoinMarketCap.
