The Ripple CTO David Schwartz has clarified how Ripple sells XRP, especially in connection to ODL, amid growing concerns.
This clarification was necessary amid recent remarks and an escalation of erroneous speculation within the community as XRP continues to underperform. Multiple investors have expressed concerns about XRP’s underperformance compared to the broader market.
Despite Bitcoin (BTC) breaching the $52,000 level and Ethereum (ETH) closing in on the $3,000 threshold, XRP has remained underneath $0.60 since dropping below this zone last month. Several community members believe this underperformance is due to price suppression triggered by Ripple sales.
Ripple’s Programmatic Sales
Most recently, documents providing details on Ripple’s programmatic sales of XRP resurfaced, triggering new concerns. As The Crypto Basic previously reported, Schwartz explained that Ripple already stopped these programmatic sales.
He cited the firm’s Q1 2023 XRP markets report, where they confirmed that they had halted programmatic sales since 2020. According to the report, Ripple only sells XRP to its ODL (now Ripple Payments) partners to cater to fotoiquidity in needs for cross-border payments.
However, an anonymous community member accused the Ripple CTO of withholding the truth, citing the fact that Ripple’s XRP balance has continued to deplete despite the firm claiming to have stopped programmatic sales of XRP.
In his words:
“[David Schwartz] is misleading us to believe they stopped dumping XRP while, in fact, they actually found another way to dump XRP.”
Schwartz, perplexed by the community member’s response, highlighted that the report itself does not particularly state that Ripple stopped selling XRP entirely but details that they have continued XRP sales, but only to ODL partners.
I'm misleading people about how much XRP we're selling and how we're selling it by posting an excerpt that states clearly how much XRP we're selling and how we're selling it?!
— David "JoelKatz" Schwartz (@JoelKatz) February 17, 2024
For context, the broader XRP community is well aware of Ripple’s continuous XRP sales. The Crypto Basic has also reported the figures in previous reports. For instance, the firm sold 893 million XRP in Q3 2023, per a disclosure from its markets report.
Ripple Continues to Buy and Sell XRP
Meanwhile, pro-crypto attorney Bill Morgan entered the discussion, seeking to know how Ripple sells some of the XRP unlocked from escrow each month despite claiming that it sources XRP from the open market for ODL sales.
I think his concern, or at least some segment of the XRP community, is if Ripple’s sales for ODL since 2020 are only sourced from the market and programmatic sales stopped in 2020 how is Ripple selling the monthly Escrow release that is not re-escrowed (I don’t know the answer).…
— bill morgan (@Belisarius2020) February 17, 2024
It bears mentioning that Ripple previously disclosed that it buys XRP from the open market to sell to its ODL partners. However, the firm receives 1 billion XRP from escrow each month but retains a portion of these assets, often 200 million, and re-locks 800 million.
Morgan aims to understand what Ripple does with the 200 million XRP it retains from the unlocked funds if XRP sold to ODL partners is indeed sourced from the open market.
In response, Schwartz clarified the difference between programmatic sales and sales to ODL partners. He stressed that programmatic sales involve buying and selling XRP on exchanges but ultimately reduce the company’s XRP holdings.
That's why I highlighted the portion that explains how we're selling XRP and even explained it in more detail in several posts including the one linked here.https://t.co/vzCd5mwBoR pic.twitter.com/NR013tURqL
— David "JoelKatz" Schwartz (@JoelKatz) February 18, 2024
However, with ODL sales, a company buys XRP from Ripple and leverages the XRP tokens to bridge between two fiat currencies for cross-border transactions related to Ripple Payments. Notably, Ripple continues to buy back XRP from the open market.
Nonetheless, Schwartz emphasized that there are periods when the amount of XRP that Ripple sells to these ODL partners is greater than the amount of XRP it buys back from the market. This difference results in the company effectively reducing its XRP balance.
For context, in the Q1 2023 report, Ripple confirmed that it sold 2.93 billion XRP into its ODL partners in the first quarter of 2023. However, the company only purchased 2.56 billion XRP within this timeframe. At this point, Ripple sold more XRP than it bought.
Disclaimer: This content is informational and should not be considered financial advice. The views expressed in this article may include the author's personal opinions and do not reflect The Crypto Basic’s opinion. Readers are encouraged to do thorough research before making any investment decisions. The Crypto Basic is not responsible for any financial losses.
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