3 - 5 minute read
In December, large holders of XRP, also known as whales and sharks, increased their holdings of the cryptocurrency to all-time highs. According to analytics firm Santiment, these holders, who control wallets with 1 million to 10 million XRP, saw their total number and percentage of supply surge to new highs, reaching 1,617 addresses and 7.23% of the circulating supply, respectively. This accumulation came despite the bear market and the ongoing legal battle between Ripple Labs and the US Securities and Exchange Commission (SEC).
The legal challenges faced by Ripple Labs stem from a lawsuit brought by the US Securities and Exchange Commission (SEC), which alleges that the company conducted an unregistered securities offering of XRP. This lawsuit has had a negative impact on the price of XRP, which has remained in a downtrend since May. However, the recent accumulation by large holders may indicate their belief that the outcome of the lawsuit will be favorable for Ripple Labs and that the price of XRP will eventually recover.
The increase in XRP accumulation by large holders began in mid-November, around the same time that CoinShares reported inflows into XRP-focused investment products. This may reflect positive investor sentiment about the outcome of the SEC’s case against Ripple Labs. However, the collapse of FTX and the departure of traditional financial institutions from crypto-oriented products did not deter these large XRP investors from continuing to accumulate.
XRP Price Remains in Downtrend
Despite the increased accumulation by large XRP holders, the price of the cryptocurrency has remained in a downtrend since May. It is currently trading around $0.3437. This downtrend may be attributed to the SEC’s lawsuit against Ripple Labs, which alleges that the company conducted an unregistered securities offering of XRP.
🐳🦈 #XRPNetwork whale and shark addresses that share the 1M to 10M $XRP tier have been rapidly accumulating to end 2022. In December, both the amount of these sized addresses (1,617) and their percentage of supply held (7.23%) have hit a new #AllTimeHigh. https://t.co/R8bDPUviq1 pic.twitter.com/4GyrMPxYPV
— Santiment (@santimentfeed) December 20, 2022
Opportunity to Buy Low
The crypto market has experienced significant volatility over the past few years, with frequent fluctuations in the prices of various cryptocurrencies. A downturn, or bear market, refers to a prolonged period of declining prices and declining market sentiment. Bear markets can be caused by a variety of factors, including regulatory uncertainty, negative news headlines, and market manipulation.
The recent downturn in the crypto market was caused by the FTX contagion, a series of events that took place in late November and early December of 2022. It began with the collapse of the Singapore-based cryptocurrency exchange FTX, which was caused by a series of unusual trades that resulted in significant losses for the exchange. The collapse of FTX led to a sell-off in the broader crypto market, with many cryptocurrencies experiencing sharp declines in price.
Positive Investor Sentiment
The increase in XRP accumulation by large holders began in mid-November, around the same time that CoinShares reported inflows into XRP-focused investment products. This may reflect positive investor sentiment about the outcome of the SEC’s case against Ripple Labs. However, the collapse of FTX and the departure of traditional financial institutions from crypto-oriented products did not deter these large XRP investors from continuing to accumulate.
What Does This Mean for Retail Traders?
The increased accumulation of XRP by whales and sharks may indicate their confidence in the long-term potential of the cryptocurrency. Retail traders who follow the actions of these large holders may also be more inclined to hold onto their XRP or even add to their positions. However, it is important for retail traders to conduct their own research and analysis before making any investment decisions. The ongoing legal battle between Ripple Labs and the SEC, as well as the overall state of the crypto market, should also be taken into consideration.
