Early XRP Investors Continue to Influence Price, Here’s How They Do It

XRP’s price has shown limited growth despite the ongoing interest surrounding the cryptocurrency. Recent insights shed light on this phenomenon. Jake Claver, CEO of Digital Ascension Group, suggests that this pricing stagnation is primarily due to structural factors rather than Ripple’s escrow activities or retail investor behavior, as they significantly affect how XRP is supplied to the market.

Key Takeaways

XRP’s price stagnation stems from structural factors influencing supply rather than Ripple's escrow or retail actions.
Institutional sales through OTC trades and dark pools allow large sell-offs without affecting public market prices.
ETFs are consuming XRP through the same private channels utilized by early investors, further limiting supply.
Until OTC supplies tighten, XRP’s price may remain restricted, even with a strong demand present.

XRP ETF breekt record $1 miljard vandaag kan de Ripple koers stijgen naar $13?

Understanding How XRP Investors Sell Without Disturbing the Market

Claver highlighted that significant sales of XRP are taking place through institutional avenues like over-the-counter (OTC) trades and dark pools, which keep the transactions away from public scrutiny instead of occurring on public exchanges. He pointed to trading platforms such as FalconX and the dark pool infrastructure offered by Kraken. These platforms cater mainly to institutional investors, hedge funds, and early adopters looking to execute large trades without alerting the market.

This has crucial implications because public exchanges are very responsive to large sell orders. When substantial sales are executed on these exchanges, it often results in quick price drops as other traders react to the influx. In contrast, OTC desks facilitate private matching of buyers and sellers, allowing XRP to change hands without causing immediate changes in market prices. Consequently, large volumes of XRP can be sold while the overall market chart appears stable.

For early investors who acquired XRP at much lower prices in the past, this method is incredibly effective. It enables them to gradually exit the market or adjust their holdings without compromising the pricing of their trades. However, this creates a disconnect in the broader market; even if demand exists, a consistent supply entering through these private channels keeps price surges in check. This situation explains why XRP may have difficulty rising significantly, even during positive market sentiment or robust narratives around its network.

ETF Demand Is Quietly Reducing Available Liquidity

An essential aspect of Claver’s observations came from a follow-up comment. A reader inquired about the estimated timeline for when the supply available through OTC desks might diminish. Claver noted that the supply of XRP is decreasing daily, with ETFs actively consuming the available liquidity.

This conversation is crucial for comprehending the broader context. ETFs typically do not buy XRP on public exchanges in a way that disrupts pricing. Instead, they obtain liquidity through OTC desks— the same avenues early investors use to offload their holdings. Consequently, this means that ETFs are steadily accumulating XRP that would have otherwise been available for discreet distribution. Over time, this alters the market structure. As ETFs and other institutional products continue to withdraw from OTC inventories, early investors will find it increasingly challenging to sell large stakes without impacting public markets. When this occurs, the selling will become more apparent, and price discovery will shift back to the exchanges.

Until the supply available through OTC channels decreases significantly, XRP’s price may remain constrained, despite sustained interest. The key takeaway is clear: the current price suppression is not due to a lack of interest in XRP, but rather a consequence of how and where early investors opt to sell their holdings.

XRP price chart from Tradingview.com Price continues to move upward | Source: XRPUSDT on Tradingview.com