Ripple recently sent almost 64 million XRP to the wallet of its former CTO, Jed McCaleb. This gigantic transfer was spotted by Whale Alert a few hours ago. As expected, it has raised the fears of a potential dump in the XRP market.
63.7 Million XRP Sent To Jed McCaleb’s Wallet
A couple of hours ago, Whale Alert notified the public of the transfer of at least 63,704,590 XRP from Jed McCaleb’s settlement wallet to the former CTO’s personal wallet. At the time, this recent tranche of coins was worth $12,293,769.
Whale Alert noted that the huge transfer is part of the settlement between Jed McCaleb and Ripple. The monitoring resource further explained that XRP is periodically sent from the Jed McCaleb wallet to a personal account where he then sells the XRP on the open market.
— Whale Alert (@whale_alert) April 8, 2020
This transfer is part of the settlement between Ripple and Jed McCaleb. From his account Tacostand the #XRP periodically gets sent to the account rLkM…Q1A where it is being sold. https://t.co/je2py8Ntc4
Although Ripple and McCaleb have a structured agreement that dictates how he should sell his XRP tokens, fears of a market dump linger as he still owns billions of XRP waiting to be sold.
Predictably, a number of crypto enthusiasts commented on Whale Alert’s post citing that a dump is coming.
A Threat To XRP’s Price?
In 2012, Jed McCaleb and Chris Larsen co-founded Ripple Labs. McCaleb, however, left the company the following year to create the Stellar (XLM) cryptocurrency. He was compensated with 9 billion XRP tokens for his role at Ripple, and these tokens were spread over a number of addresses, as per Whale Alert’s Medium post.
These coins are often sold on the open market, much to the chagrin of XRP investors. But the real question is, do these transfers really affect XRP’s price?
Whale Alert observed that “compared to the total trade volume per day, the amount he is selling seems insignificant.” The post reveals that McCaleb sold 1.05 billion XRP between 2014 and last year. He currently holds around 4.7 billion XRP which is equivalent to roughly 5% of the total XRP supply. It will take around 20 years for him to sell all his XRP stash.
Nonetheless, Whale Alert posited that his perennial XRP sales add to the net amount of XRP available:
“Even though we do not yet have enough data to make a conclusive statement on this, we can determine that, because he is exclusively selling XRP, he is adding to the net amount available”.
Whale Alert also noted that his contract with Ripple is likely to expire sometime this year. This could see him accelerating his XRP sell-off. McCaleb has been cashing out via Bitstamp but there is no proof that he reinvests the profits back to the crypto markets, Whale Alert stated.
XRP is exchanging hands at $0.199 at press time. The coin is in the red, just like bitcoin (BTC) and ethereum.
