Supply Shock Narrative Faces Doubt As XRP Exchange Reserves Hit 8-Year Lows
Despite XRP exchange reserves hitting 8-year lows in late 2025, analysts doubt this guarantees a supply shock or immediate price rally.Summary
XRP reserves held on centralized exchanges (CEXs) plummeted in 2025, falling from about 4 billion tokens to 1.6–1.7 billion by December, reaching levels not seen since 2018, which fueled speculation about a 2026 supply shock. However, analysts caution that low exchange balances historically do not guarantee price surges, citing similar low reserve periods in 2018 and 2022 that preceded price declines or rallies much later. Reduced exchange supply primarily eases short-term selling pressure rather than creating new demand. Furthermore, the data supporting the low reserve narrative is incomplete; one analyst found that expanding coverage from 10 to 30 exchanges revealed approximately 14 billion XRP held, significantly higher than the widely cited low figure. The market's dynamics are also influenced by anticipated events like Ripple's routine monthly escrow releases, which are often treated as non-events, suggesting factors like ETF inflows and regulatory clarity may be more significant drivers for XRP demand.
(Source：BeInCrypto)