XRP, a cryptocurrency, is experiencing a shrinking supply, which some analysts believe could lead to a significant price increase. Let’s break down why.
A Limited Supply of XRP
A crypto analyst, known as ’24HRSCRYPTO’ on X, points out that far less XRP is available for trading than many people realize. A significant portion is locked up, limiting the amount available on the open market.
Here’s the breakdown:
- Ripple Labs: Holds a massive 37.3 billion XRP (37.3% of the total supply) in escrow, plus another 3.5 billion (3.5%) in liquid reserves.
- Co-founders: Chris Larsen owns 2.3 billion XRP (2.3%), and Arthur Britto holds 1.3 billion (1.3%).
- Total Locked: This adds up to almost 44.4% of the total XRP supply already locked up, before even considering institutional holdings.
- Retail Investors: Hold about 15% of the circulating supply.
The analyst worries about what will happen when major players like JP Morgan, Wells Fargo, or Goldman Sachs enter the market. If these institutions start buying, billions more XRP could be locked away, potentially creating a serious supply shortage.
Institutional Interest is Growing
The situation is further complicated by growing institutional interest in XRP. Canadian ETFs like Purpose and 3iQ already hold millions of XRP, representing a significant portion of the available supply. This is just the beginning, and more institutional investment is expected. A new fund, REX-Osprey XRPR, recently added over $10 million in assets, highlighting the increasing inflow of capital.
Technical Analysis Suggests a Price Surge
Technical analysts are also optimistic about XRP’s price. ‘Captain Redbeard’, another crypto expert on X, points to a “bullish flag” pattern on the price chart. This pattern often signals an upcoming price increase. He predicts XRP could rise to $4.30, a significant jump from its current price. The recent breakout from a consolidation period further supports this prediction.