Ripple Won’t Dump Its XRP Escrow Holdings: Lawyer Reveals Why It’s Actually Good For Price

Legal expert Bill Morgan has commented on accusations that Ripple would dump its XRP escrow holdings at some point. He explained why that won’t happen and noted how the escrow strategy is good for the altcoin’s price. 

Ripple’s Escrow Will Buttress XRP Price Not Deflate It

In an X post, Bill Morgan noted that even the SEC recognized that Ripple’s escrow was intended to buttress the XRP price and not deflate it. He added that even the Commission considered this to be one of the factors that would give investors an expectation of profit from the crypto firm’s efforts. 

The legal then remarked that this is just one of the points that clearly debunks the ‘dump theory’ around Ripple’s escrow. His response was in reply to a crypto community member who criticized XRP holders who think that the escrow is good for their holdings. He then indicated that the crypto firm would at some point dump its holdings on these investors. 

Meanwhile, Bill Morgan had earlier noted how there hasn’t been a stark difference between Ripple’s escrowed funds in 2017 and now. He revealed that the crypto firm had 55 billion XRP in escrow in late 2017 while it now has 35 billion in escrow. Ripple unlocks 1 billion XRP monthly. As such, these escrowed funds should have reduced drastically since 2017. 

However, Ripple typically relocks a significant portion of these coins following the monthly unlocks, which explains why the crypto firm’s holdings haven’t flooded the market. Notably, the firm uses these coins for its on-demand liquidity (ODL) services. As such, the coins that are left unlocked are in demand, which also provides a boost for the XRP price. Ripple is also looking to expand its operations, which could further boost the altcoin’s adoption. 

Reason For the Escrow ‘Dump Theory’

In response to the accusations against Ripple, Bill Morgan suggested that many of these crypto community members have been simply sidelined on the recent XRP price rally. As such, he believes this is why they are trying to spread Fear, Uncertainty, and Doubt (FUD). In an X post, he asked a particular critic if they missed out on XRP when it was still trading at $0.20.

Indeed, the XRP price had traded around this level in 2023 and remained stuck in the $0.50 range for most of 2024 before finally taking off in the last quarter of the year, recording a rally of over 500%. The altcoin has continued this run this year and last week rallied to a new all-time high (ATH) of $3.65. 

At the time of writing, the XRP price is trading at around $3.50, up in the last 24 hours, according to data from CoinMarketCap.

Featured image from Getty Images, chart from Tradingview.com