A commentary from an XRP community pundit suggests that most market participants fail to realize just how scarce the truly available circulating supply of XRP has become. The core argument is that almost half of the total supply is already accounted for by entities that are unlikely to sell, setting the stage for a massive supply squeeze once institutional buying begins.
The Anatomy of the Supply Squeeze
The scarcity argument is built on two primary factors: the locked supply held by insiders and the external market mechanisms that are further reducing the available float.
Locked Insider Supply: Over 40% of the total XRP supply is claimed to be already accounted for by Ripple, its founders, and early institutions. This includes:
Ripple Escrow: Approximately 35.31 billion XRP (around 35.3% of the total supply) locked in escrow.
Founders/Liquid Holdings: An additional 7.1 billion XRP controlled by Ripple's liquid holdings and co-founders Chris Larsen and Arthur Britto.
Retail and Institutional Gap: It's estimated that retail investors control only around 15% of the total supply. With spot ETFs anticipated and major financial institutions (like JPMorgan and Goldman Sachs) yet to fully enter the market, the pundit warns that these future purchases will quickly absorb the remaining available float.
External Factors Exacerbating Scarcity: New yield-bearing projects like Axelar's mXRP and Flare’s FXRP are actively locking up more supply, with targets that could absorb up to 13% of the circulating supply. Furthermore, exchange reserves are dwindling, evidenced by major exchanges like Coinbase emptying their XRP cold wallets.
📌 Conclusion: The Price Discovery Is Imminent
The confluence of massive, permanently held insider balances, rapidly declining exchange reserves, and new yield projects absorbing supply has created a fundamental scarcity for XRP. The pundit concludes that the current price level is not the market's top, but rather a strong signal of what's to come. Once trillion-dollar institutions begin accumulating, the small available float will disappear, triggering a "sharp and fast" price adjustment that will initiate genuine price discovery.
🔐 Disclaimer
This article is for informational purposes only and does not constitute financial advice. The cryptocurrency market is highly volatile, and investments carry a significant risk. You should always conduct your own research (DYOR) and consult with a professional financial advisor before making any investment decisions.