XRP's Astonishing Scarcity: Trading Supply Could Mirror Bitcoin's 21 Million Cap
A groundbreaking analysis suggests that Ripple's XRP token could experience an unprecedented "short squeeze," dramatically reducing its available trading supply to levels comparable to Bitcoin's finite 21 million coin cap. This potential shift, driven by major institutional lock-ups and market dynamics, hints at a future where XRP's scarcity fundamentally reshapes its valuation.
Institutional Lock-ups Driving Supply Contraction
The discussion was ignited by prominent crypto commentator Chad Steingraber, who highlighted that the actual XRP available for retail trading is a fraction of its total circulating supply. This phenomenon is largely attributed to significant institutional commitments: Axelar plans to lock up an astounding $10 billion worth of XRP, while Flare Networks aims to secure 5 billion XRP. These initiatives alone would remove approximately 5% of the token's current supply from active trading, placing immense pressure on the remaining liquidity. Steingraber emphasizes that market pricing is influenced by the active trading supply, not merely the total supply. Further exacerbating this scarcity are other factors, including dwindling XRP reserves on exchanges like Coinbase and Ripple's own substantial holdings locked in escrow, released under strict schedules.
The Potent Impact of Extreme Scarcity on Valuation
Should the available trading supply indeed plummet to a mere 21 million XRP – a figure mirroring Bitcoin's maximum supply – the implications for its price would be profound. With XRP's current circulating supply at around 59 billion tokens and a market price of $2.89, its market capitalization stands at roughly $172.8 billion. If this same market capitalization were concentrated within just 21 million tokens, the implied price per XRP could surge to an astonishing $8,120. This ambitious scenario gains further traction with the anticipated approval of Spot XRP ETFs in the United States, which would generate consistent demand for custody, leading to large-scale accumulation and a permanent restriction of tokens from public exchanges. Such institutional demand would likely trigger frequent supply shocks, underscoring the potential for a radical revaluation of XRP in the market.
