In the cryptocurrency market, XRP has always been a controversial presence. Some call it the 'number one bubble coin,' yet its astonishing performance in every cycle cannot be ignored. This seemingly contradictory phenomenon can actually be explained by its chip distribution.
From the URPD data of XRP, its chip structure shows three significant characteristics. First, the distribution is highly imbalanced: 30% of the circulating supply is concentrated in the $0.32-$0.62 range, with nearly 10% of circulating chips gathered at just the $0.36 price point; secondly, the $2-$2.5 range accounts for 19%. This centralized distribution lays the groundwork for market volatility.
(Figure 1)
What is even more concerning is the characteristic of 'high control': a large amount of chips are held at extremely low costs, with unrealized profits being substantial. This means that the main players can achieve substantial returns by selling at most price levels, making the market prone to 'explosive rallies.' On the flip side, there is a severe lack of turnover at high levels; above $2.6, there is almost no effective turnover, indicating a lack of capital support at high levels. Once the upward momentum weakens, the decline can be exceptionally rapid.
As the third-largest cryptocurrency with a market cap of $200 billion, such a chip structure is clearly unhealthy. The direct consequence is 'sharp rises and falls': rapid price increases under control are easy to achieve, but lack of subsequent capital participation and sufficient turnover results in weak price support, leading to quick rises and even quicker falls.
For players, this structure means opportunities and risks coexist: a few early movers may profit by following the main players, but most retail investors who enter the market during hot trends (FOMO) often find themselves trapped at high positions or forced to sell at a loss. If the market weakens, the decline may exceed expectations. Of course, if a spot ETF is approved later, it could bring structural changes.
In contrast, looking at Bitcoin's URPD data reveals what a healthy chip structure looks like: balanced distribution with sufficient turnover in high price ranges. This is not a rapid price increase under control, but rather the result of continuous capital participation, gradually pushing up prices after absorbing low-position chips.
(Figure 2)
This 'solid' chip structure, while having a slower upward pace, can form a strong support. This is why Bitcoin tends to be one of the least affected coins during market corrections; its balanced chip distribution provides resilience against declines.
The 'crazy performance' of XRP and the 'steady performance' of Bitcoin essentially reflect the differences in chip structures. For players, understanding the logic behind chip distribution may be more important than chasing short-term trends.
