The number of Ripple (XRP) whales has increased since the start of 2023.
Ripple Labs and whales accumulate XRPs.
Ripple Buyback Theory returns ahead of Ripple vs. SEC lawsuit conclusion.
The whales have moved more than five billion XRP tokens since the first day of 2023. Some of these tokens flew to the anonymous wallets or settled into the wallets of Ripple Labs.
The levels of XRP supply distributed among the large holders are rising to all-time highs. At the same time, the controversial theory of Ripple buyback returns to the crypto community. What is going on?
XRP Whales Move Funds, but Hold
Whales transferred more than 5.5 billion XRP tokens in January, as showed the data of the on-chain transaction tracker Whale Alert.
Within the past week alone, over 1.2 billion XRPs were moved in and out from unknown wallets. Several major transactions occurred right after Ripple named Monica Longs as its new President on January 26.
253,594,773 #XRP (103,264,033 USD) transferred from unknown wallet to unknown wallethttps://t.co/jLpTtfQ6jn
— Whale Alert (@whale_alert) January 27, 2023
Large-scale XRP transactions, representing dozens of millions of XRPs, often ended on anonymous wallets, activated just days before receiving an inflow.
The funds there moved on a similar pattern: an anonymous wallet transferred several hundred million of XRPs to another anonymous wallet, funds stayed there for a few days or a week, then traveled to another newly activated wallet, lay there for some time, and kept moving further.
Smaller transactions (usually up to a few million XRPs) to crypto exchanges these large-scale moves from wallet to wallet. Their destinations were typically Bitstamp, Bitso, or Bitvavo, crypto exchanges that have partnerships with Ripple Labs and act as corridors for the company’s On-Demand Liquidity (ODL) service enables instant cross-border payments.
Despite that, a few hundred million XRP holdings remained untouched and kept moving.
400,000,000 #XRP (140,495,686 USD) locked in escrow at unknown wallet https://t.co/ocn8gybims
— Whale Alert (@whale_alert) January 2, 2023
More Mega Whales Accumulate XRP
January accounted for sone of the highest XRP wallet activities since the summer of 2022. The number of daily active addresses surpassed 140K three times in a row, according to Santiment’s data.
Despite the brief spike in the first days of December, such high and repetitive XRP wallet activity has not been seen since July 2022.
Source: Santiment.net
However, the most notable changes occurred in the balances of XRP whales. The number of addresses holding between 100 million and one billion XRPs has increased by 11.4% and ended the downtrend lasting since December 27, 2023.
The amount of XRP supply held in the hands of these whales grew up by 2.64%, meaning that they currently hold 18.94% of XRP’s supply. The number is among the highest in years, just a few percent lower than the 21.37% ATH reached on December 20, 2023.
Source: Santiment.net
According to Santiment, the number of addresses holding from one to ten million XRPs also showed signs of growth. However, the increase was more moderate and appeared within the 1% range.
The cumulative share of the total XRP supply held in the hands of large-scale addresses (above one million tokens) reached 74.16% at the time of writing.
Ripple Labs Keeps Unlocked XRPs
Ripple Labs also showed interest in purchasing XRP tokens over the first month. The company locked back 700 million XRP tokens into its escrow the next day after one billion XRPs were traditionally unlocked from one of its escrows.
Such an unlock has been a monthly practice since 2017 when Ripple Labs locked 55 billion tokens into multiple smart contract-controlled ledger escrows to boost the price and ensure the predictability of the XRP supply.
400,000,000 #XRP (140,495,686 USD) locked in escrow at unknown wallet https://t.co/ocn8gybims
— Whale Alert (@whale_alert) January 2, 2023
The same day the company made another 300 million XRPs transaction, moving tokens from escrow to one of its wallets. Later that month, Ripple Labs transferred another 50K of XRP tokens to one of its wallets.
Although unusual, the instant lock-up of freshly released XRPs was not the first time Ripple Labs did so. The company locked up 2.1 billion XRPs out of three billion newly released from its escrows over the last quarter of 2022.
Sells Less, Buys More
Ripple Labs is eventually decreasing its XRP sales. According to its Q4 report of 2022, the company sold $226.31 million worth XRPs. It is $84,37 million less compared to the previous quarter and $490 million less compared to the Q4 of 2021.
In addition to that, the company simultaneously increased its XRP purchases. Ripple Labs accumulated $2.73 billion worth of XRP tokens in Q4 2022. This is 9% more than in Q3 and 750% more than last quarter of 2021.
“Ripple Labs has been a buyer of XRP in the secondary market and expects to continue to undertake purchases as ODL continues to gain global momentum,” states the quarterly report. The company says that its XRP sales are only possible when in connection with its ODL transactions.
Source: Ripple.com
Last year Ripple Labs expanded its XRP-powered ODL services to 40 markets. The ODL contributed to nearly 60% of total XRP transactions.
The company is active in Central Bank Digital Currency (CBDC) development after it launched a platform for central banks to issue their CBDCs back in 2021.
With nearly 90% of the world’s central banks involved with CBDC today, Ripple Labs expects that at least 50% of the global population will use digital wallets for transactions by 2024.
By 2024, at least 50% of the world’s population is expected to use digital wallets for transactions, valued at over $9 trillion annually.
Our whitepaper explores how Central Banks can utilize #CBDCs to take advantage of this growth. https://t.co/ewnfvOenrD
— Ripple (@Ripple) November 26, 2022
Ripple Buyback Discussions Return
The whales’ return coincided with optimism that the notorious Ripple vs. SEC lawsuit may finally be over this year.
At the same time, discussions around the controversial Ripple buyback theory renewed after influential Ripple Labs contributor and securities attorney Jimmy Vallee reminded everyone that XRP buyback might be possible if Ripple’s legal battle with the SEC ends in favor of the company.
XRP BuyBack discussion into context. @ripple has already done a stock buyback which increased their valuation from $10 Billion to $15 Billion. Post SEC lawsuit why would a similar thing not be done with XRP? What if they need a higher XRP price. How would you do it? pic.twitter.com/wB1apd7Vg3
— Digital Asset Investor (@digitalassetbuy) January 30, 2023
The Ripple buyback theory, introduced by Jimmy Vallee back in 2021, relies on a thesis that XRP may become the world’s next reserve currency. According to it, the current financial system, especially in the US, whose dollar is the world’s reserve currency, is facing trillions of dollars of debts, which are not sustainable.
The world’s economies may be destined to move towards a new financial system to solve the debt problem. The new financial system should have a liquid and scalable digital asset to support the global wealth’s total value.
According to the theory, the bridge currency XRP could be an asset. But to make it come true, the government must first hold large numbers of XRP to guarantee liquidity.
Theoretically, this could be achieved by purchasing the supply of the XRPs from the secondary market. The precedent was set in the Great Depression when the US government purchased gold from the citizens to fill the empty federal reserve.
To keep the market stable, XRPs should come at a fixed price. This means that if XRP covers all the world’s wealth, its market cap should accordingly reach quadrillions of dollars. According to the Ripple buyback theory, the price of XRP, with a finite 100 billion supply, could linger between $37K and $50K.
The theory raised a lot of discussion across the XRP community. The critics claim that it is unachievable, especially when XRP comes with the centralized Ripple Labs company, and governments are experimenting with their CBDCs. Countries like China are working towards making their fiat the world’s reserve currency.
In addition, legal limitations are strengthening around the globe, preventing institutions from buying and holding large or any amounts of digital currencies.
Closing Thoughts
Ripple Labs and XRP must go a long way to become the global reserve currency. Even to establish the XRP as the main bridge currency for international value transfers, the company must first overcome its major legal hurdle with SEC.
While the XRP community is looking for the Ripple vs. SEC lawsuit to end this year, the XRP whales are making their moves. As whale activity is often an indicator of something larger brewing, it is worth keeping a close eye on their movements. Even if the significant XRP price moves have yet to materialize.
Find out more on recent changes at Ripple:
Ripple Shakes Up Leadership Ahead of XRP Lawsuit Outcome
Learn more about the CBDCs:
CBDC Explained: Everything You Need to Know About Central Bank Digital Currency
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