XRP caught the attention of investors today after it experienced a massive crash, dropping from a high of $3.1 to as low as $1.9. Even though the coin has rebounded toward $2.4, the significant decline created a shock within the XRP community.
While investors are hoping for a positive year for XRP, the reality says otherwise, leaving investors confused about what is next for the coin. Meanwhile, speculations are rising, with blame pointing toward Ripple as the reason behind the crash. But, is Ripple really behind it?
Ripple Releases 500 Million XRP From Escrow
Earlier today, 36crypto reported a significant transfer of XRP by Ripple from its escrow account. This transfer aligns with its monthly XRP escrow releases, but this time, with a little difference.
This massive transfer coincided with the XRP decline, which triggered conjectures among XRP community members as they cite this as the reason behind the dip. According to on-chain data, Ripple released the 500 million XRP across two transactions.
Also Read: Massive XRP Crash: Here is What Happened Today and What Next
The first one moved 100 million XRP, worth $283.8 million, on February 2, to the Ripple (26) wallet address. Shortly after, the second transfer was initiated, carrying a whopping 400 million XRP (valued at $1.14 billion) to the same address. Cumulatively, both transfers amounted to $1.42 billion.
Interestingly, this transfer deviates from Ripple’s pattern of releasing 1 billion XRP from escrow monthly. Notably, Ripple also unlocked 500 million XRP in January this year, adding to the rising confusion among observers, but that is not all.
Before the 500 million XRP release, Ripple proceeded to lock 700 million XRP in escrow through two transactions. The first one locked 430 million XRP according to on-chain data, and the second one locked 270 million shortly after, raising the total to 700 million XRP.
Ripple 430 Million XRP escrow lock | Source: xrplexplorer
In summary, Ripple locked 700 million XRP in escrow, and released 500 million XRP, with the remaining 200 million XRP removed from circulation. XRP has since witnessed three consecutive days of losses, since the beginning of this month. However, Ripple’s escrow activities have nothing to do with the 15% crash.
What Really Happened
It is important to know that the XRP crash isn’t an isolated event. In fact, the global crypto market is currently experiencing a significant drop. According to coinmarketcap data, the total crypto market cap declined by 7% in the last 24 hours to reach $3.13 trillion
Bitcoin (BTC), the leading cryptocurrency, fell below the $100k mark today and is currently trading at $95,531. The second-largest cryptocurrency by valuation, Ethereum (ETH), nosedived by 15.9% to trade at $2,600 at the time of writing.
The reality of the situation is that the market is currently reacting to broader economic updates. Donald Trump, the president of the United States, implemented significant tariffs on imports from three countries including Canada, China, and Mexico.
Trump instigated this tariff as a way to curb illegal immigration and drug trafficking in the country. Consequently, the three affected countries announced retaliations, imposing similar tariffs on imports from the U.S., increasing concerns about a global trade war.
Ultimately, the current market crash, including the massive XRP crash was triggered by growing tension among investors amid global economic uncertainties. It is worth mentioning that 36crypto previously warned about an imminent XRP crash in our previous prediction post, citing $2.5 as the next.
Also Read: 5 Altcoins to Keep a Close Eye On
