XRP Exchange Balances Hit Lowest Level in Nearly Eight Years

Source: CryptoNewsNet Original Title: XRP Exchange Balances Hit Lowest Level in Nearly Eight Years Original Link:

XRP Exchange Balances Drop to 8-Year Lows Amid Shift to Self-Custody

XRP exchange balances have dropped to their lowest level in nearly eight years. This signals a sharp shift in how holders manage supply. Data shows that balances across major centralized exchanges have fallen to around 1.6 billion XRP, down from roughly 3.76 billion XRP in October. The decline reflects a steady move toward self-custody as investors pull tokens off exchanges.

Exchange Supply Falls as Holders Move to Cold Storage

The latest figures suggest a clear behavioral change among XRP holders. Over the past three months, more than 2 billion XRP have left exchange wallets. This pushed balances to levels last seen between 2017 and 2018. Such declines usually indicate reduced short-term selling pressure. When tokens sit on exchanges, they are easier to trade. When holders move them to cold storage, it often reflects longer-term conviction or reduced appetite to sell at current prices.

Analysts note that the trend aligns with broader market behavior seen during periods of accumulation. XRP’s exchange supply now represents a much smaller share of circulating tokens compared with prior market cycles.

Spot XRP ETFs Drive Demand

At the same time, U.S. spot XRP exchange-traded funds have emerged as a major source of demand. These products launched in November 2025, led by major issuers. In just over 50 days, the ETFs attracted more than $1 billion in net inflows. As of early January, they collectively hold an estimated 746 to 760 million XRP, roughly 1.1% of the circulating supply.

The rapid growth highlights rising institutional interest, explaining part of the exchange balance decline as ETF issuers source XRP from the market and move it into custodial wallets. Market participants expect further products to launch, which may add additional demand channels.

Ripple Escrow Actions Limit New Supply

Supply dynamics tightened further at the start of the year. On January 1, Ripple relocked 700 million XRP into escrow as part of its regular supply management process. While Ripple unlocks 1 billion XRP each month, a significant portion is typically returned to escrow. This practice limits the net increase in circulating supply and adds predictability to issuance. Combined with falling exchange balances, the relock reduced the immediate supply available to the market, causing XRP’s liquid float to continue shrinking.

Market Outlook Remains Mixed but Watchful

Some analysts argue that these conditions could support higher prices if demand remains steady. They cite ETF growth and regulatory clarity as key factors. However, others urge caution, noting that ETF inflows can fluctuate and broader crypto market sentiment still plays a role. Macroeconomic risks and policy decisions remain critical variables.

Currently, the data shows one clear trend: XRP is becoming harder to find on exchanges. As 2026 unfolds, traders and institutions alike will watch whether reduced supply translates into sustained price momentum.