Ripple Q1 Financial Report: Zero Buybacks, Doubled Sales, Growth in Large Holder Addresses

Ripple has released its market report for the first quarter of 2021, as usual covering quarterly sales updates, relevant announcements, market status, a summary of the previous quarter, and the latest developments in the case where the U.S. Securities and Exchange Commission (SEC) accused them of selling unregistered securities.

Ripple first summarized the current market situation, pointing out that the total market capitalization of the crypto market increased from $800 billion to $2 trillion in the first quarter, with involvement from institutions such as Morgan Stanley, Goldman Sachs, and BlackRock being a major driving force.

However, the report also mentioned the phenomenon of market over-leverage. In the first quarter, a mere 10% drop in Bitcoin could cause liquidations of $15 billion. Looking back at March 12, 2020, when Bitcoin dropped by nearly 50%, the total liquidations were only about $14 billion.

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On-Demand Liquidity (ODL)

The ODL platform is a key application promoted by Ripple, which converts the sender's currency into XRP tokens for transfer, enabling efficient and real-time settlement by converting it into the target currency.

Ripple CEO Brad Garlinghouse announced on 3/9 the termination of the long-standing partnership with its ODL partner, MoneyGram, but Ripple also acquired a 40% stake in the Asian cross-border payments company, Tranglo, in the first quarter.

Today, we’re announcing that Ripple and MGI have together decided to wind down our current partnership agreement, and are both committed to revisiting it in the future. See our full statement: 1/2 https://t.co/KGOzPWuThR

— Brad Garlinghouse (@bgarlinghouse) March 8, 2021

Sales Update

Looking back at Ripple's first-quarter sales data, Ripple has been implementing buybacks since the third quarter of last year. Despite always selling more than buying, for the first time in the first quarter of this year, there was zero buyback, and amidst the SEC lawsuit, Ripple sold a record-breaking $1.5 billion worth of XRP, nearly twice as much as in the fourth quarter of last year.

Ripple emphasized in the announcement that sales related to ODL include leasing, XRP token sales, and OTC, primarily used to promote the adoption of ODL. The sales figures include short-term leases provided to market makers, and the tokens leased will eventually be returned to Ripple, but the leased amount is often misconstrued as selling.

XRP Escrow

XRP Escrow is the official account that controls 55% of Ripple's circulating supply of XRP, currently releasing 1 billion XRP tokens from the escrow account every month.

In the first quarter, Ripple released a total of 3 billion XRP, with 1 billion released monthly and 2.7 billion returned, indicating a net outflow of 300 million XRP, slightly lower than the 400 million in the fourth quarter of last year. According to the official statement, the outflow of XRP covers the amount leased short term and does not represent Ripple selling, but the actual situation is unknown.

Growth in Whale Addresses

Reports indicate that XRP whale addresses with at least 1 million XRP increased from 308 to 319, a 3.5% growth, while addresses with 1 million to 10 million XRP increased from 1,125 to 1,196.

As of now, the Ripple lawsuit is still ongoing. In the latest ruling, it was stated that Ripple's motion to compel the SEC to produce emails of its staff, aimed at disclosing the SEC staff's private opinions on Bitcoin, Ethereum, and XRP, was denied by Judge Sarah Netburn. However, the SEC was also ordered to produce documents and internal memoranda that represent its official stance on Bitcoin, Ethereum, and XRP.

Over time, the SEC seems to have failed to directly prove that XRP is a security, and Ripple is gradually gaining an advantage in the lawsuit.