XRP supply shock narrative gains traction, but analysts call it overblown

Cryptocurrency markets have been stirred by renewed chatter around a purported XRP “shortage”, a narrative suggesting dwindling available supply could spark a dramatic price surge. However, a closer look at the data and expert analysis reveals that this storyline is more hype than substance, while Bitcoin continues to dominate market dynamics and investor attention.

Several individuals in the crypto community shared their thoughts on the ongoing intense discussion in the industry regarding the XRP supply shock theory. In this discussion, many participants raised concerns about the rapid decline in the quantity of Ripple tokens on exchanges. Based on their observation, this decline consequently impacts the price of XRP.

Nonetheless, as the discussion continues to intensify in the crypto industry, experts such as Bill Morgan have expressed their disapproval of the participants’ argument. This assertion prompted reporters to reach out to Morgan for comment on the disagreement.

Responding to this, the crypto lawyer argued that the swift decline in the quantity of Ripple tokens on exchanges does not significantly impact the price shifts of the Ripple token. Instead, he believes that the trend displayed by Bitcoin plays a crucial role in influencing XRP’s price changes.

Morgan also alleged that the XRP supply shock theory fails to provide a sufficient understanding of the token’s price trend pattern. With this argument in mind, the prominent figure in the crypto ecosystem stressed the point that the Ripple token’s price shifts are closely related to BTC’s activities.

Several individuals raise concerns about XRP’s decline in supply

Morgan shared an X post dated Monday, December 29, saying:  “I have criticized the supply shock theory just as I did with the silly Ripple escrow dump theory. Neither of these theories provides significant insight into understanding XRP price movements. What really matters is what Bitcoin’s price is doing; that’s the key factor.” 

He made these remarks at a time when a reliable source had published reports of a drastic decline in the amount of XRP available on exchanges. The report noted that the supply decreased by about 1.5 billion tokens. 

Feedback from the crypto community and analysts suggests a common factor behind this drop. They argued that the decrease may be connected to shifting market sentiment among investors, as significant holders appear to be moving their tokens to centralized exchanges (CEXs), probably for long-term storage.

Meanwhile, apart from Morgan, the XRPL dUNL validator, VET, also disagreed with the crypto community’s argument that the supply of XRP on exchanges has declined. According to VET, the supply is abundant, citing recent reports that declare the total supply of the Ripple token available on exchanges to be approximately 16 billion.

After this argument was displayed, sources concluded that the tweet stressed the flexible nature of XRP liquidity. It also noted how varying it can be, adding that, “If the price rises or falls, anyone without XRP on exchanges can send theirs in just 3-4 seconds. Therefore, the token listed for sale on order books is also dynamic. It can quickly increase or decrease in volume.”

Analysts observed that a $10 million purchase occasionally had the potential to boost the price, resulting in a rise. At other times, reports noted that a $100 million purchase might struggle to prevent the price from declining.

However, even with this argument in place, several individuals still raise concerns about the possibility of an XRP supply shock and its impact on the price of the Ripple token. Recent feedback suggests that the increasing interest in XRP ETFs is a factor contributing to this situation.

The possibility of an XRP supply shock sparks tension in the ecosystem 

Established in November 2025, the XRP ETF has drawn significant attention from investors, with more than $1.25 billion in net assets collected. As a result, fewer tokens have been left on exchanges for direct trading. 

Following this finding, a prominent crypto commentator on the X platform with the username unknownDLT weighs in on the matter. The individual acknowledged that XRP ETFs are acquiring the existing Ripple token supply at a faster and increasing pace. This claim has therefore prompted the analyst to believe in the possibility of an XRP supply shock sooner than anticipated, with recent reports indicating a substantial 750 million token absorption.

Experts, on the other hand, stated that this is the perfect time for a considerable surge in the prices of XRP. They asserted that this can be achieved because of the connection between a drop in supply and an increase in demand.

In the meantime, analysts predict that the value of the crypto will substantially increase, despite the current situation in which exchanges face hardships and buyers in the market begin to collect the insufficient supply. Moreover, reports indicate that the ongoing investment in ETFs may help alleviate the aggressive selling pressure exerted on the Ripple token, sparking hope in the cryptocurrency ecosystem.

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