Ripple Rises, Yet Its Cofounder Is Offloading XRP Tokens—Here’s Why
A recent WSJ investigation uncovers that Ripple’s cofounder has significantly increased his XRP token sales over the past month.
Despite Ripple’s XRP experiencing a price drop last month, one of its cofounders has notably sped up the sale of his XRP holdings.
The Wall Street Journal reports that Jed McCaleb, Ripple’s cofounder, was previously selling between 20,000 and 40,000 XRP daily up until July. However, in August, his daily sales surged dramatically. McCaleb, who departed Ripple Labs to establish Stellar, reportedly sold approximately 499,312 XRP per day, peaking at 752,076 XRP on a single day. This period coincided with a 25% decline in XRP’s price throughout August.
McCaleb’s XRP token sales have persisted into the current month, with daily sales valued at around $150,000 over the last six days. He has not disclosed specific reasons for this increased selling activity but assured the Journal, "I’m not selling more than I have agreed to with Ripple." (Also see: Is Ripple’s Price Surge a Bubble?)
Over the weekend, Ripple’s price briefly soared following optimistic announcements about the launch of xRapid, a new product leveraging XRP. Should xRapid gain adoption among banks, it could significantly enhance XRP’s liquidity and market value. However, this price boost was short-lived, and the cryptocurrency, ranked third in market value, has since lost up to 40% of those gains. As of 19:35 UTC, XRP traded at $0.45, down 13.25% compared to the previous day.
Profiting from Increasing Valuations
According to WSJ, McCaleb and a donor-advised fund linked to him collectively hold about 7.3% of the total XRP supply. His personal and family holdings amount to roughly 5.3 billion XRP. Originally, McCaleb’s sales were subject to daily caps, but in 2016, these limits were adjusted to a percentage of the daily XRP trading volume.
The appreciation in XRP’s value has substantially increased the wealth of Ripple’s founders and bolstered the parent company’s financial resources. In response to the price rise, Ripple Labs has intensified investments in external ventures and launched a venture fund targeting blockchain and cryptocurrency startups. Meanwhile, McCaleb’s Stellar blockchain, which shares similar technology with Ripple but focuses on emerging markets and nonprofit sectors, recently partnered with IBM and introduced a stablecoin built on its platform. (Also see: What is Stellar Blockchain?)
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