XRP Price Prediction: Will the Token Surge Despite Its Shrinking Supply?

Steph Is Crypto (@Steph_iscrypto), a prominent crypto analyst on X, recently shared some intriguing data about XRP's diminishing supply. This sparked debate within the cryptocurrency community and prompted a closer examination of the token's circulation patterns and potential price implications.

Crypto analyst Steph Is Crypto recently shared data about XRP’s diminishing supply, sparking discussion in the cryptocurrency community.

Steph’s analysis, based on CryptoQuant data, suggests that XRP’s price trajectory could be influenced by what he perceives as supply constraints.

Despite the token’s recent bearish performance, Steph maintains optimism, suggesting that increasing demand and supposed supply reduction could trigger substantial price appreciation.

“The next big move is only a matter of time,” he stated.

However, a closer examination of XRP’s supply metrics reveals a more nuanced situation. While the token’s maximum supply is fixed at 100 billion, the actual reduction in circulation has been relatively modest.

Despite other experts’ statements about the asset’s supply dynamics, current data indicates that only 13,275,691 XRP tokens have been permanently removed from circulation through burning mechanisms, leaving the total supply at approximately 99.986 billion tokens. This minimal reduction challenges assertions about significant supply constraints driving future price movements.

An analysis of XRP holdings on major cryptocurrency exchanges provides additional context. Throughout 2024, XRP’s presence on centralized exchanges has remained relatively stable, contrasting sharply with the declining exchange reserves observed in other major cryptocurrencies.

A look at Binance, the largest cryptocurrency exchange, reveals that XRP reserves dropped from 3.14 billion to 2.79 billion between November and December 16. However, these levels are now returning to the 3 billion mark, consistent with the average holdings maintained in most days of 2024.

While XRP’s exchange reserves remained stable, other major cryptocurrencies like Bitcoin experienced a significant decline in exchange presence. BTC reserves decreased substantially from 3.07 million to 2.42 million this year.

Ethereum’s exchange presence also fluctuated, dropping from 20.66 million to 18.6 million before settling at approximately 19 million tokens. Shiba Inu also demonstrated a substantial reduction in exchange reserves, declining from 167.34 trillion tokens last December to 134.4 trillion.

Despite the data suggesting stable supply levels, numerous market analysts maintain bullish predictions for XRP. Most of their predictions depend on other factors, not current supply metrics. While supply dynamics remain a crucial consideration, they represent just one component, and external factors might play a more significant role.