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Thursday, December 1, 2022

XRP Shares Goes Down

Ripple Labs just released the results of its third-quarter report for 2022. In this post, we will see what happened to Ripple’s XRP holdings and why it is important for the digital asset ecosystem.

Ripple Labs sold 3 billion XRP in 2019 and just 2.6 billion XRP in 2020, which is the lowest amount of XRP sold by the company since 2016.

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In total, Ripple Labs has sold about 40 billion XRP tokens since its inception. It is currently holding around 50 billion tokens, which is close to 20% of the total supply (100 billion).

While the company’s use case for selling off a portion of its holdings has been questioned multiple times over the past few years, analysts believe that it could be a good sign for investors as it indicates that Ripple might be planning to increase its use case with more payments platforms and integrations.

XRP Faces Unwanted Turmoil

A report released by Ripple Labs recently revealed that the company’s holdings of XRP had fallen below 50% for the first time since the digital asset was created.

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Ripple Labs sold 3 billion XRP in 2019 and just 2.6 billion XRP in 2020, which is the lowest amount of XRP sold by the company since 2016. In comparison, Ripple sold 7 billion XRP in 2017 and 8 billion XRP during 2018, according to CoinMarketCap data.

The report suggests that this decrease could be attributed to a drop in demand for investment-related services from crypto exchanges and other financial institutions as well as reduced activity on RippleNet itself – its customized blockchain network used by more than 200 banks worldwide – due to “challenging market conditions facing companies seeking capital markets exposure through token sales.”

According to Ripple, the sales are “programmatic,” which means they’re not manual and have a smoothing effect on the market. In other words, they have a negative impact on price.

“By nature, programmatic sales have a smoothing effect on the market and give us less price visibility into where XRP is headed,” said Sagar Sarbhai, Ripple’s SVP of Government and Regulatory Affairs.

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