Exchange reserves of XRP have fallen to a seven-year low of about 1.6 billion tokens. That is half the supply that sat on exchanges at the October 2025 peak.
The main driver: institutional buying through exchange-traded funds. Multiple XRP ETFs have absorbed nearly one billion tokens since their launch earlier this year, pulling coins off exchange order books and into custodial wallets.
Ripple Labs still holds the overwhelming majority of XRP – roughly 36 billion tokens locked in smart contract escrows. The company releases one billion tokens each month from those contracts, though it typically re-locks most of the freed supply.
The shrinking exchange inventory changes the market’s plumbing. With fewer tokens available for immediate sale, the sell-side depth has thinned. For active traders, that means smaller orders can move the price more than they would in a deeper market.
This supply tightening comes at a time when XRP is already outperforming many other large-cap cryptocurrencies. ETF demand has been a consistent tailwind, and the declining exchange reserves reinforce that narrative – at least for now.
The biggest risk to this setup is the Ripple escrow. The company has discretion over whether to sell or re-lock its monthly releases. If Ripple changes its policy and starts selling more tokens into the market, the exchange supply could bounce back quickly.
Traders should watch two data points: the weekly exchange reserve tallies from major data providers, and Ripple's next escrow report. If the reserves keep falling and the escrow releases remain mostly re-locked, the supply squeeze will persist.
XRP Exchange Supply Drops to 7-Year Low as ETFs Remove 1 Billion Tokens
The amount of XRP tokens available on exchanges has halved due to institutional buying through exchange-traded funds, reducing coins for active traders. This matters because fewer tokens on exchanges can make XRP prices more sensitive to smaller sales.