XRP Price Surges to 2-Year High as Airdrop Frenzy Builds

The December airdrop of 45 billion spark tokens may be fueling XRP's rapid climb to two-year highs, say analysts.

AccessTimeIconNov 24, 2020 at 9:37 a.m. UTC
Updated Dec 10, 2022 at 8:22 p.m. UTC
10 Years of Decentralizing the Future
May 29-31, 2024 - Austin, TexasThe biggest and most established global hub for everything crypto, blockchain and Web3.Register Now

XRP has chalked up an impressive rally to two-year highs in the last few days, and a coming airdrop may be driving the gains.

Trading around $0.70 at the time of writing, the world's third-largest cryptocurrency by market value is up 130% from lows near $0.30 seen on Saturday. Prices reached a high of $0.79 earlier on Tuesday, the highest level since May 10, 2018, according to the CoinDesk 20.

XRP daily chart
XRP daily chart

On-chain activity has picked up the pace alongside the price rally, with the new account activations on the XRP Ledger rising more than 200% to a record high of 5,562 in the past five days, according to data source XRPScan.

Analysts are associating the surge in XRP's price and other metrics with the smart contract platform Flare Network's airdrop of "spark" tokens to XRP holders.

The free distribution of 45 billion spark tokens, based on a snapshot of XRP addresses on Dec. 12, is supported by Ripple’s investment arm RippleX (formerly Xpring).

"The impending airdrop is supercharging the XRP bull market and whipping mindshare of one of the largest crypto communities into a frenzy," according to Jehan Chu, a managing partner at Hong Kong-based blockchain investment firm Kenetic Capital. "With the imminent launch of Flare, a smart contract utility fork of XRP, the pair will attempt to challenge Ethereum’s dominance in decentralized finance and decentralized applications."

Flare integrates with Ethereum's Virtual Machine, allowing existing Ethereum decentralized applications (dapps) to be ported over to Flare to serve the XRP ecosystem.

Some of the major cryptocurrency exchangeshttps://flare.xyz/supporting-exchanges/, including South Korea's Bithumb and Luxembourg-based Bitstamp, have announced support for the token drop.

XRP inflows spike

Exchange inflows of XRP have soared alongside the price rally, suggesting increased selling pressure in the market.

Nearly 2.3 billion XRP, worth nearly $1 billion, have been transferred to cryptocurrency exchanges since Saturday. That's more than three times the average daily inflow seen in 2019, according to blockchain intelligence firm Chainalysis.

XRP exchange inflows
XRP exchange inflows

Investors typically transfer coins to exchanges when they want to liquidate their holdings, boosting supply in the market, and take direct custody of coins when prices are expected to rally.

According to Chainalysis economist Philip Gradwell, the inflow rise doesn't necessarily imply an imminent sell-off.

"Demand has been strong so far, with median trade intensity twice the average," Gradwell tweeted. Median trade intensity, which measures the number of times an inflowing coin is traded, stood at 14 on Monday – significantly higher than its 365-day average of 5.8.

Disclosure

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.


Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.


Read more about