Ripple is set to unlock 1 billion XRP from escrow on January 1, 2026 — and traders are already bracing for the fallout. While this is simply the first scheduled release of the new year, the sheer size of the allocation has reignited talk of an “XRP dump 2026,” particularly because any meaningful portion that lands on exchanges could exert selling pressure. How Ripple’s escrow releases work Ripple’s monthly release mechanism dates back to 2017, when the firm placed tens of billions of XRP into time‑based escrows to improve supply transparency. Under that system, 1 billion XRP is released on the first day of each month. Ripple typically uses a share of the unlocked tokens for operations and then places much of the remainder back into new escrow contracts. Why traders remain cautious Even if only a fraction of the 1 billion becomes liquid, at current prices that still represents billions of dollars. Traders are therefore watching on‑chain flows closely, especially transfers to exchanges or unknown wallets that could presage selling. December’s escrow activity — which showed large moves to non‑exchange wallets — reinforced the view that Ripple has been controlling distribution rather than dumping into markets. Past patterns suggest limited market impact Historically, Ripple has re‑locked between roughly 60% and 80% of monthly unlocks, which has limited the volume that actually reaches circulation. Previous 1 billion XRP releases have had muted effects on price, with XRP largely tracking broader crypto market trends rather than reacting to the escrow dates alone. Developer comment and market context Ripple CTO David Schwartz summed up the mechanics plainly: “They always release on the first day of the month. You may not necessarily see any on ledger activity just because the escrow has released, though.” That ambiguity — an automatic release that doesn’t always show immediate ledger movements — keeps traders attentive. The timing comes at a sensitive moment. At the time of writing XRP is trading around $1.98, down roughly 2% over 24 hours and about 6% on the week, having slipped under the $2 support level that had recently acted as a launchpad for gains. While past releases didn’t trigger major selloffs, the combination of sizeable potential liquidity and a fragile price backdrop is why market participants are nervously watching the January unlock for signs of renewed volatility. Read more AI-generated news on: undefined/news

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