Supply Shock Narrative Faces Doubt As XRP Exchange Reserves Hit 8-Year Lows

XRP reserves on centralized exchanges (CEX) fell sharply in 2025, dropping from roughly 4 billion tokens firstly of the yr to round 1.6–1.7 billion by December. This marks the bottom ranges since 2018, prompting hypothesis over whether or not a provide shock may emerge in 2026.

However, analysts warning that low alternate balances alone might not translate into rapid worth stress or a sustained rally.

XRP Exchange Reserve Decline in Historical Context

Data from Glassnode exhibits XRP alternate holdings falling from 3.76 billion on October 8, 2025, to 1.6 billion by late December, triggering dialogue of potential short-term shortage.

The sharp discount coincided with Ripple’s routine release of 1 billion XRP from escrow on January 1, 2026.

However, historic tendencies recommend that declines in alternate reserves don’t mechanically result in worth surges.

In late 2018, XRP reserves have been at comparable lows, but costs continued to pattern downward. Likewise, on the finish of 2022, a big reserve drop didn’t set off a rally till late 2024.

“While consideration stays on worth, the true change is going on within the background… liquidity is being eliminated. The market turns into thinner, extra delicate, and much more reactive to demand,” said Web3Niels, a market analyst.

In different phrases, diminished exchange supply mainly eases short-term selling pressure relatively than creating new demand.

Data Coverage and Exchange Reporting Limitations

The provide shock narrative has confronted further scrutiny as a result of incompleteness of the info. Popular on-chain analytics supplier Glassnode tracks roughly ten exchanges. Still, analyst Leonidas expanded the protection to 30 platforms, discovering roughly 14 billion XRP held throughout exchanges in late 2025. This is considerably larger than the 1.6 billion determine usually cited.

“Glassnode’s chart solely exhibits knowledge from 10 exchanges, and solely from wallets they’ve linked to these exchanges… Gathering knowledge from extra exchanges, particularly those holding billions of XRP, would higher mirror actuality and any potential tendencies,” wrote Leonidas.

This discrepancy highlights the problem of counting on restricted alternate knowledge. XRP’s high liquidity means tokens could be shortly moved on and off platforms, making static reserve numbers much less dependable as predictors of market habits.

“XRP listed on orderbooks on the market is dynamic… generally $10M shopping for can push worth larger and generally $100M shopping for doesn’t cease worth from happening,” wrote analyst Vet_X0.

Ripple’s month-to-month escrow launch provides one other layer to the narrative. On January 1, 2026, Ripple unlocked 1 billion XRP, of which solely about 200–300 million entered circulation resulting from routine relocking of 60–80%.

With the discharge totally anticipated, market individuals largely considered it as a “non-event,” unlikely to drive dramatic worth modifications.

Factors akin to XRP ETF inflows, institutional adoption, and US regulatory developments, significantly the upcoming CLARITY Act, might affect XRP demand extra considerably than fluctuations in alternate reserves.

While XRP reserves are at 8-year lows, the general provide image stays dynamic, and any potential 2026 provide shock is much from assured.

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