Ripple Exchange Supply Falls to Lowest Level Since 2018

• XRP held on centralized exchanges has dropped to a roughly seven-year low.
• The decline reflects sustained net outflows from exchanges over recent months.
• Reduced exchange supply has not yet resulted in a sustained price increase.

XRP Exchange Supply Reaches Multi-Year Low

The supply of XRP tokens held on centralized cryptocurrency exchanges has fallen to its lowest level in around seven years, according to on-chain data, marking a notable shift in how the asset is being stored and accessed by market participants.

Exchange supply refers to the amount of a digital asset held in wallets controlled by trading platforms, where tokens are readily available for buying and selling. A sustained decline in this metric typically indicates that more holders are moving assets off exchanges into private wallets or institutional custody, reducing the immediately liquid supply.

For XRP, the drop places current exchange balances at levels last seen in 2018, shortly after the asset’s peak during the previous crypto market cycle. The trend has developed gradually but accelerated in recent months.

Why Exchange Supply Matters

In crypto markets, exchange balances are often used as a proxy for potential selling pressure. Higher balances can suggest that holders are positioning to sell, while declining balances may point to accumulation or long-term holding strategies.

A reduced exchange supply can also affect market structure by tightening liquidity. With fewer tokens available on trading venues, price movements can become more sensitive to changes in demand. However, lower supply alone does not guarantee upward price action, particularly in markets influenced by broader macroeconomic and sector-wide factors.

Drivers Behind the Decline

Several factors appear to be contributing to XRP’s shrinking exchange supply. One driver has been increased long-term holding behavior, with investors withdrawing tokens from exchanges to self-custody or third-party custodial services. These transfers remove XRP from liquid trading pools without reducing overall circulating supply.

Another factor has been institutional demand through regulated investment products. The launch of spot XRP exchange-traded funds in late 2025 introduced a new source of demand that requires physical XRP to back issued shares. Tokens acquired for these products are typically held in custody rather than on exchanges, contributing to net outflows.

Institutional custody solutions and structured products linked to XRP have also expanded, further shifting balances away from retail-focused trading venues.

Price Action Remains Muted

Despite the contraction in exchange supply, XRP’s market price has not shown a sustained breakout. The token has continued to trade within a relatively narrow range, failing to hold above key technical levels even as liquid supply declined.

This disconnect highlights the limits of supply-based indicators in isolation. While long-term holders and funds may be absorbing XRP, periodic inflows to exchanges from other holders have offset the effect, maintaining selling pressure during price rallies.

Short-term trading activity, derivatives positioning, and broader sentiment across crypto markets have also influenced price behavior, limiting the immediate impact of reduced exchange balances.

Broader Context for Ripple and XRP

The current exchange supply trend comes as Ripple continues to position XRP within cross-border payments and financial infrastructure use cases, following years of regulatory uncertainty in the United States.

Although regulatory developments have improved clarity for XRP-related products, market participants remain cautious, particularly amid uneven liquidity conditions across digital asset markets. As a result, structural changes in supply have not yet translated into decisive shifts in valuation.

Market Implications and Risks

If exchange balances continue to decline while demand remains steady or increases, XRP could eventually face tighter liquidity conditions. In such an environment, periods of heightened volatility become more likely, especially during large buy or sell events.

At the same time, a reversal in the trend such as increased deposits to exchanges could signal renewed distribution by holders, counteracting the supply contraction narrative. Analysts generally caution that exchange supply metrics should be viewed alongside broader indicators, including trading volumes, derivatives data, and macroeconomic conditions.

What to Watch Next

Market participants will be closely monitoring whether XRP exchange supply continues to fall into early 2026 and how this trend interacts with institutional inflows and broader crypto market liquidity. Sustained withdrawals would reinforce the case for long-term accumulation, while renewed inflows could suggest changing sentiment.

The balance between shrinking liquid supply and active sell-side pressure is likely to remain a key factor shaping XRP’s market dynamics in the months ahead.