A recent viral thread has brought to the forefront a long-standing debate in the cryptocurrency community regarding Ripple’s practices concerning its $XRP token. The thread argues that Ripple has been systematically selling off hundreds of millions of $XRP each month to finance its operations, allegedly diluting the holdings of its investors. According to the thread, when $XRP was launched in 2012, the total supply was set at 100 billion tokens. Founders retained 20 billion tokens, while the remaining 80 billion were allocated to the company.
In December 2017, Ripple locked 55 billion $XRP into smart contracts, releasing 1 billion tokens each month. The thread claims that Ripple usually relocks 70% to 80% of the released tokens, retaining about 200 million to 300 million $XRP monthly to sustain operations. At current market values, this retained amount is estimated to be worth around $400 million. It goes on to argue that while the community has long speculated that major banks would adopt Ripple’s technology—a sentiment commonly referred to as the “bull case”—the existing structure dilutes individual holders monthly, leading to gradual depreciation of their investments. The thread notes that $XRP has seen a decline for six consecutive months.
In response to the criticism, lawyer Bill Morgan promptly countered the claims made in the thread. He questioned the reasoning behind the assertion that Ripple’s monthly sales directly lead to the decline in $XRP’s price. Morgan pointed out that the thread’s author admitted to Ripple’s longstanding practice of selling tokens, yet could not provide a satisfactory explanation for $XRP’s price increases during periods when Ripple was also selling.
Morgan argued that the fluctuations in $XRP’s price are primarily influenced by the performance of Bitcoin rather than the monthly sales conducted by Ripple. He suggested that if the selling pressure from Ripple were genuinely impacting the price, the effects would have been observable across different market cycles. Instead, $XRP has experienced substantial gains even when Ripple continued its selling practices.
Adding a broader perspective, Morgan highlighted that since Ripple began selling $XRP thirteen years ago, the token’s value has surged by an astonishing 24,602%. He noted that Ripple currently holds around 33% of the total supply in escrow, a decrease from earlier figures, which implies that any theoretical selling pressure is lessening rather than compounding.
This ongoing discussion reflects the complexities and differing opinions within the cryptocurrency space, showcasing differing interpretations of market behaviors and tokenomic structures.
