XRP Whales Increase as Ripple's Escrow System Limits Supply

XRP Whales Increase as Ripple’s Escrow System Limits Supply

26 June 2024

in XRP

Reading Time: 3 mins read

Whale accumulation threatens retail availability, controlling almost half of the current XRP supply.
Ripple’s escrow system releases limited XRP monthly, creating artificial scarcity.

XRP is definitely home to more whale addresses than most people would think; supply data even reveals an intriguing concentration among these whale wallets.

This phenomenon was recently brought to attention on social media by XRP enthusiast Chad Steingraber. With the SEC case against Ripple finally drawing to an end, the supply distribution indicates that XRP is likely to experience a supply constraint soon.

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The #XRP public supply today is far less than people realize. You will never see 100Billion on the open market.

It will vaporize into a small scarce amount.

Retail trading determines the price. ???? https://t.co/BBWpJeSljl pic.twitter.com/m8BBirjJd3

— Chad Steingraber (@ChadSteingraber) June 22, 2024

[crypto-donation-box]

Increase in XRP Whales Raises Scarcity Concerns

XRP was launched with 100 billion XRP tokens in circulation overall. But XRP has managed to be rare even with this enormous amount of tokens that might theoretically be available. Steingraber brought attention to this intriguing difference recently, pointing out that the public supply is significantly less than people think.

The reason XRP is scarce in part is that Ripple controls most of the supply through an escrow mechanism that releases a tiny amount every month. Specifically, it is known that this escrow system holds about 40 billion XRP coins that are now unavailable to the general public.

This controlled supply paradigm has resulted in an unnaturally small circulating supply. The small amount of XRP accessible on exchanges is under tremendous buying pressure as demand far exceeds the release of this limited supply.

Whale Accumulation Threatens Retail Availability

Apart from the roughly 39 billion XRP tokens held in escrow, whale accumulation in recent months has put XRP’s availability for ordinary traders in risk.

Out of the 55.6 billion XRP in circulation at the moment, the top 10 XRP addresses control about 11.2 billion. The top 50 addresses also control 26.9 billion XRP, or nearly half of the current supply.

Less than 16% of the total Bitcoin circulating quantity is owned by the top 103 Bitcoin addresses, for instance. When one compares the maximum supply of both cryptocurrencies, the disparity becomes much more obvious. The ideal conditions exist for XRP whales to keep controlling the circulating supply because of this supply-and-demand imbalance.

Meanwhile, CoinGecko data shows that the price of XRP is about $0.4739 at the time of writing, down 0.58% from the previous day. This also shows a negative stance, with a 3.69% drop within the last seven days.

Previous to that, CNF reported that XRP trade volume increased 170% to $1.035 billion. Moreover, the AMM pools of the XRP Ledger contain about 10 million XRP locked.