XRP reserves on centralized exchanges fell sharply in late 2025, sliding to about 1.6 billion tokens by late December, the lowest level since 2018. The steep decline has reignited discussion around a possible supply shock, although historical patterns suggest low exchange balances alone do not guarantee an immediate price rally.
Data shows exchange-held XRP dropped from roughly 3.76 billion tokens in early October 2025 to 1.6 billion by year-end, a drawdown of more than 57% in under three months. This marks one of the fastest contractions in XRP’s liquid supply in recent years.
Analysts attribute part of the decline to a structural shift following the launch of spot XRP ETFs in November 2025. The products have reportedly attracted over $1 billion in net inflows, with large volumes of XRP moving into custodial wallets and long-term storage off exchanges, reducing immediately tradable supply.
The supply squeeze comes against a backdrop of strong fundamentals in 2025, including the resolution of the long-running SEC case and growing institutional participation. Yet XRP ended the year down about 13%, highlighting a disconnect between market structure improvements and price performance.
Similar lows in exchange reserves were recorded in late 2018 and late 2022, periods that did not produce instant rallies. Market observers note that while shrinking supply can set the stage for upside, broader demand conditions and macro sentiment remain decisive.
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