While Bitcoin, Ethereum, and many altcoins have been surging, XRP often struggles to keep pace. For long-term holders, this can be frustrating—especially when the rest of the market is in rally mode. The reasons, however, are not purely emotional; they’re rooted in XRP’s supply mechanics, demand dynamics, and market perception.
🔒 The Escrow Mechanism — Ripple’s Controlled Supply Release
One of the most misunderstood aspects of XRP’s tokenomics is its escrow system. Ripple Labs currently holds around 40 billion XRP in escrow, set to be released in monthly installments for the next 6–10 years.
Monthly Unlocks: Up to 1 billion XRP is unlocked at the start of each month.
Re-locking: A large portion—often 70–80%—is sent back into escrow if not used.
Transparency: These movements are recorded on-chain and are predictable, so they’re no surprise to the market.
For example, in June 2025, Ripple released 1 billion XRP but re-locked 670 million. Only 330 million XRP actually entered the circulating supply. This pattern repeats almost every month, meaning the real supply increase is smaller than the headline numbers suggest.
📊 Does Escrow Always Hurt Price?
Many traders believe that constant supply releases automatically suppress price. However, history shows it’s not that simple:
During the 2017–2018 bull run, XRP rose from $0.50 to over $3 despite the escrow program being in full swing.
Analysts like Bill Morgan argue that demand, not supply, is the bigger driver of price. Escrow is structured and predictable—unlike surprise token dumps by some projects.
In short: supply alone doesn’t dictate price—market demand must match or exceed it.
💡 The Demand Problem
The larger challenge for XRP is stagnant demand growth:
Limited Speculative Buzz: Many traders prefer volatile assets like memecoins or DeFi tokens.
Slow Utility Expansion: While Ripple has strong partnerships (especially in cross-border payments), real-world adoption at scale is gradual.
SEC Lawsuit Hangover: The long-running legal battle with the SEC damaged market confidence, and recovery has been slow.
A healthy token economy needs both controlled supply and growing demand—XRP currently excels at the first but struggles with the second.
🎭 Marketing vs. Market Reality
Ripple is known for high-profile marketing campaigns and corporate partnerships with banks and payment providers. This creates the impression of unstoppable growth.
However, the market doesn’t just respond to news—it responds to liquidity and token flow. Even if Ripple announces partnerships, if circulating supply keeps growing faster than demand, prices remain capped.
⚖ Price Ceiling & The $10 Myth
Many XRP enthusiasts hope for $10 per token, but let’s break down the math:
Current Market Cap: ~$30 billion at $0.50 price.
At $10: Market cap would exceed $600 billion—more than Bitcoin at today’s prices.
Supply Growth: With billions more XRP to be released, achieving that valuation would require extraordinary adoption and demand.
This doesn’t mean XRP can’t rise significantly—it just means $10 in the short term is unrealistic under current conditions.
📉 Short-Term Volatility from Escrow Events
While escrow is predictable, the market still reacts to certain unlocks:
After a 1B XRP unlock, the token sometimes drops 5–6% in days following, as traders fear increased supply.
On rare occasions, XRP has dropped over 20% post-unlock when combined with negative market sentiment.
Most months, however, the re-locking of unused XRP reduces actual sell pressure.