The long-running debate about XRP’s escrow and its influence on the market has picked up steam lately because of crypto lawyer Bill Morgan’s comments on social media.
The discussion was about the role of Ripple’s escrow in the price of XRP after the digital asset’s price rose from $0.50 to over $3.00 even though releases from escrow continued in late 2024 and early 2025.
What is there to say about the discredited escrow dump theory that has not already been said. If it needed a coup de grace to send it to its final resting place, it was the massive rise in XRP price from $0.50 to over $3.00 despite further releases of XRP by Ripple from escrow in… https://t.co/cqTcjR4k2N
— bill morgan (@Belisarius2020) February 27, 2025
“Escrow Dump” Theory Challenged
This rise challenges the escrow dump theory, which claims that Ripple’s monthly escrow releases cause the market’s volatility.
Bill Morgan took on the misconception in a post, pointing out that the monthly XRP released from escrow is a small percentage of the overall daily trading volume. As the total XRP supply increases, the relative rate of XRP held in escrow keeps going down.
Escrow Effect on XRP Price Questioned
According to Morgan, even if the volume of XRP released from escrow stayed the same while the total supply grew, the market’s response would not match claims of an escrow dump.
Related: Ripple’s XRP Escrow Explained: Dispelling Myths and Fears
He stressed that the escrow releases, which make up a decreasing percentage of XRP’s total supply, do not have the harmful effect that critics suggest.
“Escrow Dump” Narrative “Flawed”
The larger point made by Morgan was that the narrative surrounding the “escrow dump” theory was not only flawed but also not supported by the market’s actual behavior.
Related: Ripple’s 500 Million XRP Escrow Lock Triggers Whale Alert
He highlighted how, even as Ripple continues to release XRP from escrow, the asset’s price rose, showing that the issue lay elsewhere if price declines were to happen in the future.
SEC Scrutiny of Ripple’s Escrow Program
This debate comes as Ripple’s legal fight continues. The firm has faced scrutiny from the U.S. Securities and Exchange Commission (SEC), which has argued that Ripple’s escrow program is a major factor in influencing XRP’s price.
However, in November 2024, Morgan explained that Ripple’s share of XRP holdings had decreased from 55% in 2020 to below 39%. This change shows Ripple’s declining control over the asset, further challenging the notion that the company’s escrow releases are a major factor in XRP’s price movements.
XRP Market Lagging Bitcoin’s Growth
The conversation around XRP also includes a comparison to Bitcoin regarding market price movements.
While Bitcoin has seen growth with institutional involvement and more adoption, XRP’s price trend has not mirrored the same success.
XRP Price Stagnant Despite Market Factors
DefiBanked.sol, a notable crypto commentator, pointed out that XRP’s price has been relatively stagnant, with fluctuations only occurring when external factors, such as political statements, reignite interest in the asset.
Oh, the irony… XRP maxis calling Bitcoin outdated tech is like a guy riding a fax machine into battle while laughing at someone in a fighter jet. 🤡
First movers fail? Tell that to gold, the internet, and, well… Bitcoin. Meanwhile, XRP is still waiting for a use case outside… pic.twitter.com/6iYCJkMpxC
— DefiBanked.sol (@DefiBanked) February 26, 2025
The crypto community remains divided, with some defending XRP’s claimed use cases, while others criticize its lack of real utility outside of speculative predictions and corporate partnerships.
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