Not every XRP enthusiast is happy that Ripple still holds large reserves of the token. In the first quarter, the company sold fewer of its holdings than ever before.
Ripple is well known for its regular XRP sales. Since 2017 the company has periodically released additional coins into circulation. Over the years, Ripple placed billions of XRP into escrow to influence how supply reaches the market.
Historically, Ripple sold roughly one billion XRP per month. Recently, however, those fresh supply amounts have been significantly smaller, prompting debate within the community about the reasons. According to the company, sales in the most recent quarter were at their lowest level since Ripple began these distributions.
Despite criticism, Ripple’s internal sales volumes generally increased since 2017. Yet a decline became visible in the last two quarters of 2019, and that reduction continued into the first quarter of 2020, according to Ripple’s most recent report published on Thursday.
In the Q1 2020 report, sales that entered the market totaled the equivalent of approximately $1.75 million. That marks a dramatic drop compared with the previous quarter, when sales from October to December 2019 amounted to $13 million, the report states. Ripple summarized the development as follows:
“Total volume — accounting for over-the-counter sales and including programmatic pauses — closed the first quarter of 2020 at 0.6 basis points in the market-relevant CCTT index from provider CryptoCompare. In the prior quarter the value was eight basis points, representing a 99.3% decline.”
Ripple reports that it removed 3 billion XRP from escrow in Q1 2020. At the same time, 2.7 billion XRP were returned to escrow accounts.
The company attributes lower reported sales to pauses in programmatic distributions, which the firm says enabled an increase in over-the-counter (OTC) activity. Ripple expects these measures to boost liquidity in “strategic regions” and to enhance the overall utility of the XRP token.
At the same time, growing demand for Ripple’s On-Demand Liquidity (ODL) services has made the company’s real-world usage more important. Ripple is emphasizing partnerships in the banking and financial sector, assisting clients with cross-border payment solutions where XRP can be leveraged as a bridge currency.
The numbers in the report are notable. Comparing Q4 2019 to Q1 2020, Ripple reports a 294% increase in transactions related to ODL services. A significant share of that growth is attributed to the company’s collaboration with UK fintech provider Azimo.
Current market position of XRP
Ripple (XRP) is trading higher as the broader cryptocurrency market recovers from a difficult period and moves back into positive territory this morning.
XRP is currently up around 2.6%, trading near $0.25. The recent gains reflect renewed buyer interest in XRP. Yesterday the token had fallen about 6.92% and closed at roughly $0.21.
XRP’s 24-hour performance generally follows the wider market trend. Bitcoin (BTC) gained about 1.97% this morning, while Ethereum (ETH) rose roughly 2.18% over the same 24-hour period.