Why is XRP's price still stagnant? Analysts point to centralized control

Since the rise of XRP in November 2024, it has failed to break through, raising new questions about the reasons for its stagnation. Analyst José Luis Cava believes the answer lies in one word - control. In a recent video, Cava argued that despite the token's strong technical fundamentals, there is still a dominant 'hand' influencing XRP's market behavior. He pointed out that limited supply, centralized management of the token, and weak institutional demand are key obstacles.

Ripple's control over XRP supply

Unlike Bitcoin or Ethereum, XRP is pre-mined. A total of 100 billion tokens were created at launch - and no more will ever be minted. Ripple Labs initially held 80% of the total supply and still controls about 42% as of mid-2025. About 35% of this is locked in monthly escrow accounts, while 7% remains in Ripple's wallets.

Every month, Ripple releases up to 1 billion XRP, which excessively impacts its circulating supply and price dynamics. This level of control raises debates about whether XRP can truly be called a decentralized asset. Cava warns that market trends no longer reflect organic supply and demand.

Institutional demand remains elusive

Despite XRP being designed for fast, low-cost cross-border payments - an obvious utility for banks and institutions - XRP has not seen the same level of institutional appeal as Bitcoin and Ethereum. Adoption remains scant. Market uncertainties surrounding Ripple's deals with central banks, along with sparse public information about real-time integration, have led to skepticism. This hesitation may deter larger investors.

Transparency issues: private vs public ledgers

Another concern is the dual ledger architecture of XRP. The public XRP Ledger handles retail and public transactions. However, Ripple has also developed a separate, permissioned ledger specifically for central banks to explore CBDCs.

While it uses similar technology to the public XRP Ledger, this private version is not publicly accessible and operates independently. This private ledger cannot be publicly audited. While some speculate that the two systems will merge in the future, Ripple has not confirmed such plans. For many investors, this lack of transparency is a red flag. In the cryptocurrency market, transparency and decentralization are crucial for trust, and XRP's closed architecture stands out.

XRP price stagnates until structural change occurs

Technically, XRP continues to operate as designed. However, structurally, it faces challenges. High token concentration, lack of widespread demand, and limited network transparency restrict its upward potential. Unless Ripple decentralizes token distribution and opens its private operations - or a new wave of adoption occurs - XRP is likely to remain stuck in a sideways trend. As Cava emphasizes, without broader demand and a shift in governance dynamics, price momentum will not recover.