XRP Trading Supply May Shrink to 21 Million, Analyst Predicts
Ripple's XRP may be approaching a short squeeze due to potential reductions in its trading supply, aligning it with Bitcoin's hard cap of 21 million. Analyst Chad Steingraber highlighted that the actual trading supply is crucial for market pricing, not the total supply.
- Axelar plans to lock up $10 billion worth of XRP, reducing retail availability by about 5%.
- Flare Networks aims to lock up an additional 5 billion XRP.
- This accumulation could significantly limit XRP's active trading pool.
A scenario where only 21 million XRP remain available from the current 59 billion circulating supply could occur if Spot XRP ETFs are approved in the U.S., leading to increased institutional demand and potential supply shocks.
- Coinbase has reported declining XRP reserves, indicating a thinning trading pool.
- Ripple controls a substantial portion of XRP, locked in escrow and released on strict schedules.
Price Impact of Reduced Supply
If XRP's trading supply falls to 21 million tokens, its scarcity could drive the price per coin substantially higher. With a current market capitalization of approximately $172.8 billion, the implied price could reach around $8,120 per token if concentrated into 21 million tokens.
