- Coinbase and peers now hold over 1B XRP, over 3.4% of its supply, signaling strategic accumulation.
- XRP holdings surge post-SEC case shift, as exchanges position for regulatory clarity and future demand.
- Major exchanges quietly build XRP reserves, possibly preparing for ETF launches and institutional use.
In the last few months several major cryptocurrency exchanges like Coinbase silently amass over one billion XRP tokens. XRP’s circulating supply totals over 43 billion coins and this amount exceeds 3.4% of its spread. The accumulation, initially flagged by independent crypto commentator Brett on X, was not accompanied by any public announcements from the exchanges involved. The tokens appear to be held in reserve rather than distributed or sold, raising questions about the potential reasons behind the move.
Centralized Platforms Increase Holdings Amid Legal and Regulatory Shifts
This period of fast growth in XRP reserves comes as exchanges find themselves at a major crossroads of regulatory conditions for the digital asset. A U.S. federal judge ruled that XRP is not a security if it traded on public exchanges in July 2023. This was a big win for the long road that Ripple Labs had been on with the U.S. Securities and Exchange Commission (SEC) said. From this day, the SEC has decided to let the appeal go and the case is in the works of settlement.
It seems that institutional behavior has been affected by the changes in the legal landscape. In fact, XRP was delisted or restricted on some platforms during the peak of the SEC lawsuit, but Coinbase and other exchanges are ramping up their exposure to the token. Onchain data analysts have found that XRP balances on centralized exchanges have been increasing steadily, which also goes hand in hand with clearer regulation
At the same time, several asset managers including Grayscale, Bitwise, Franklin Templeton, and 21Shares have filed or explored proposals for XRP-based investment products such as exchange-traded funds (ETFs). If any of these applications move forward, the products will require substantial liquidity, potentially explaining the need for exchanges to secure large XRP reserves.
Market Influence and Supply Dynamics Could Shift
The decision by exchanges to retain large quantities of XRP could have implications for the asset’s liquidity and price behavior. Holding more than a billion tokens removes a significant portion of the circulating supply from active trading. If these reserves are later used to support institutional services, such as custodial accounts or ETF liquidity, they could impact available supply in public markets.
Other market observers have pointed out that while retail investors or short term traders could come in and out of a token, centralized platforms usually build up a stash in anticipation of the launch of a particular product offering or its expansion. This type of strategic behavior may be due to preparations for a second wave of demand by financial, or enterprise clients. It also implies higher institutional interest in XRP compared to what had been the case while it was uncertain in the law.
The activity around Bitcoin ETFs and Ethereum’s scaling has garnered most of the attention in the digital asset sector but XRP has slipped gradually into the shadows. A recent accumulation by exchanges contrasts to periods past when the token was uncertain as to whether it was a security, and doubts about whether it would survive the long term in U.S. markets.
Now legal barriers are starting to ease, focus is shifting to how XRP can be used in closing cross border payments, tokenized asset settlement, and also potential structure in ETF’s. But the presence of major exchanges involves a new aspect of this shift, suggesting that preparations for the use of these soon by institutional users may already be in place.
As of now, none of the exchanges have officially commented on their XRP holdings or potential plans. However, the scale of the accumulation and its timing suggest that significant developments involving XRP may be unfolding behind the scenes.
