If you’ve been on Crypto Twitter at all over the past few months and the past year, you know that one of the biggest controversies surrounding top altcoin XRP is how executives of Ripple Labs, the San Francisco-based fintech company that heavily leverages the cryptocurrency, own massive swaths of the coin’s supply. Not to mention, Ripple itself owns billions of these coins.
To its credit, the company has been selling increasingly fewer coins over the past few months, opting to maintain their stash, unlocked from an escrow in one-billion-coin chunks each month.
But, there’s risk in company executives (or ex-company executives) selling the cryptocurrency, potentially acting as a weight on the supply-demand scale of the asset’s price. Case in point, cryptocurrency data and monitoring team Whale Alert found that Ripple’s co-founder, prominent crypto pioneer Jed McCaleb (also heavily involved in the creation of Stellar and infamous Bitcoin exchange Mt. Gox), still has $1 billion worth of XRP to liquidate.
Ripple’s Co-Founder Could Liquidate $1 Billion in XRP
The team found that McCaleb likely has around 4.7 billion XRP — around 10% of the circulating supply, although this sum itself isn’t included in the circulating supply, and approximately 5% of the total supply of the asset — left to liquidate should he please.
At the current price of $0.28 per XRP, this multi-billion-coin stash of the cryptocurrency is valued at well in excess of $1 billion.
What’s important about this is that soon, McCaleb’s escrow agreement with Ripple is purportedly going to expire in the near future, giving him the ability to liquidate hundreds of millions of coins in a rapid amount of time, potentially acting as a negative catalyst for the uptrend XRP is currently exhibiting:
At the current rate, it would take him around 20 years to sell all of it; however, his activities have been limited by the settlement agreement with Ripple, which is likely to expire sometime in 2020.
Notably, Whale Alert could not determine whether or not the individual had a distinct impact on the price of XRP thus far, though he has only sold around $135 million worth of his stash thus far, which pales in comparison to the potential $1 billion he could unload:
But does McCaleb affect the price of [the cryptocurrency]? Compared to the total trade volume per day, the amount he is selling seems insignificant. For instance, from the 1st to the 7th of June 2017, he sold a total of 2.5 million XRP for $741,000 USD. The total trade volume that week for the XRP/USD pair on Bitstamp alone was 127 million XRP, but volume is not a good indicator for how much the market can absorb.