The post Could XRP Surge? Experts Break Down How a Supply Shock Might Fuel a Rally appeared on BitcoinEthereumNews.com. Analysts explain real XRP supply shock occurs through multiple removal mechanisms ETFs have purchased approximately $906 million worth of XRP from market inventory DeFi locking, institutional custody and escrow returns reduce tradable token pool The concept of an XRP supply shock has generated discussion recently, but two analysts state that most investors misunderstand the actual mechanics. EasyA co-founder Phil Kwok and veteran Bitcoin investor Pumpius outlined how supply shocks develop and why current price stability may mask underlying structural pressure. Kwok argues that genuine supply shock begins when XRP exits the open market through various channels. Decentralized finance will serve as one of the primary drivers of this process, according to his analysis. DeFi protocols lock tokens into systems where they cannot easily return to exchange order books. a lot of people talk about supply shocks sending the price of $XRP skyrocketing. but almost nobody explains how that actually happens. in a nutshell, xrp must be taken off the market. and one of the biggest levers for this is defi. defi takes xrp and locks it up in liquidity… — Phil Kwok | EasyA (@kwok_phil) December 3, 2025 DeFi Systems Remove Tokens From Trading Pool Liquidity pools, lending markets, collateral systems and staking mechanisms gradually absorb tokens, reducing liquid supply available to traders. Kwok stated that DeFi layers on XRPL matter because these ecosystems create an early structural squeeze on circulating supply as they expand. Pumpius outlined several mechanisms that remove XRP from circulation. Spot ETFs must purchase actual tokens rather than futures or synthetic exposure, meaning issuers buy directly from markets and pull liquid supply off exchanges. As these products attract inflows, they steadily drain available inventory. XRP ETFs have purchased approximately $906 million worth of tokens following inflows exceeding $850 million recently. This equals nearly 500 million XRP… The post Could XRP Surge? Experts Break Down How a Supply Shock Might Fuel a Rally appeared on BitcoinEthereumNews.com. Analysts explain real XRP supply shock occurs through multiple removal mechanisms ETFs have purchased approximately $906 million worth of XRP from market inventory DeFi locking, institutional custody and escrow returns reduce tradable token pool The concept of an XRP supply shock has generated discussion recently, but two analysts state that most investors misunderstand the actual mechanics. EasyA co-founder Phil Kwok and veteran Bitcoin investor Pumpius outlined how supply shocks develop and why current price stability may mask underlying structural pressure. Kwok argues that genuine supply shock begins when XRP exits the open market through various channels. Decentralized finance will serve as one of the primary drivers of this process, according to his analysis. DeFi protocols lock tokens into systems where they cannot easily return to exchange order books. a lot of people talk about supply shocks sending the price of $XRP skyrocketing. but almost nobody explains how that actually happens. in a nutshell, xrp must be taken off the market. and one of the biggest levers for this is defi. defi takes xrp and locks it up in liquidity… — Phil Kwok | EasyA (@kwok_phil) December 3, 2025 DeFi Systems Remove Tokens From Trading Pool Liquidity pools, lending markets, collateral systems and staking mechanisms gradually absorb tokens, reducing liquid supply available to traders. Kwok stated that DeFi layers on XRPL matter because these ecosystems create an early structural squeeze on circulating supply as they expand. Pumpius outlined several mechanisms that remove XRP from circulation. Spot ETFs must purchase actual tokens rather than futures or synthetic exposure, meaning issuers buy directly from markets and pull liquid supply off exchanges. As these products attract inflows, they steadily drain available inventory. XRP ETFs have purchased approximately $906 million worth of tokens following inflows exceeding $850 million recently. This equals nearly 500 million XRP…

Could XRP Surge? Experts Break Down How a Supply Shock Might Fuel a Rally

2025/12/06 03:53
  • Analysts explain real XRP supply shock occurs through multiple removal mechanisms
  • ETFs have purchased approximately $906 million worth of XRP from market inventory
  • DeFi locking, institutional custody and escrow returns reduce tradable token pool

The concept of an XRP supply shock has generated discussion recently, but two analysts state that most investors misunderstand the actual mechanics. EasyA co-founder Phil Kwok and veteran Bitcoin investor Pumpius outlined how supply shocks develop and why current price stability may mask underlying structural pressure.

Kwok argues that genuine supply shock begins when XRP exits the open market through various channels. Decentralized finance will serve as one of the primary drivers of this process, according to his analysis. DeFi protocols lock tokens into systems where they cannot easily return to exchange order books.

DeFi Systems Remove Tokens From Trading Pool

Liquidity pools, lending markets, collateral systems and staking mechanisms gradually absorb tokens, reducing liquid supply available to traders. Kwok stated that DeFi layers on XRPL matter because these ecosystems create an early structural squeeze on circulating supply as they expand.

Pumpius outlined several mechanisms that remove XRP from circulation. Spot ETFs must purchase actual tokens rather than futures or synthetic exposure, meaning issuers buy directly from markets and pull liquid supply off exchanges. As these products attract inflows, they steadily drain available inventory.

XRP ETFs have purchased approximately $906 million worth of tokens following inflows exceeding $850 million recently. This equals nearly 500 million XRP removed from public supply through ETF products. For a supply shock to materialize, this absorption must occur faster than new tokens can replace withdrawn inventory.

Banks, asset managers, settlement providers and custodians generally do not actively trade their XRP holdings. These entities hold tokens for payment rails, corporate settlement flows, or long-term treasury positioning. Once institutions custody XRP, these tokens exit the circulating pool and sit in cold storage or operational accounts rather than on exchanges.

Source: https://thenewscrypto.com/could-xrp-surge-experts-break-down-how-a-supply-shock-might-fuel-a-rally/

Disclaimer: The articles reposted on this site are sourced from public platforms and are provided for informational purposes only. They do not necessarily reflect the views of MEXC. All rights remain with the original authors. If you believe any content infringes on third-party rights, please contact service@support.mexc.com for removal. MEXC makes no guarantees regarding the accuracy, completeness, or timeliness of the content and is not responsible for any actions taken based on the information provided. The content does not constitute financial, legal, or other professional advice, nor should it be considered a recommendation or endorsement by MEXC.

You May Also Like

Can Bulls Defend the $2 Mark?

Can Bulls Defend the $2 Mark?

The post Can Bulls Defend the $2 Mark? appeared on BitcoinEthereumNews.com. The crypto market is holding its breath as the Federal Reserve is widely expected to announce another rate cut next week. With an 86% probability of a 25-basis-point reduction, the move signals a shift in monetary policy—one that could ripple through traditional and digital markets alike. For XRP price, this decision comes at a critical juncture. The token is consolidating near the $2 mark, showing early signs of compression that could lead to a decisive breakout or breakdown. How the Fed’s Decision Could Influence XRP Price Prediction When the Fed lowers interest rates, liquidity usually flows toward higher-risk assets like cryptocurrencies. Investors see reduced borrowing costs as a green light to move capital away from bonds and into speculative sectors. In the short term, this could boost demand across the crypto market, especially for large-cap coins like XRP that have historically tracked broad market sentiment. However, this policy shift isn’t without risk. If the rate cut sparks fears of inflation, the dollar might weaken temporarily, boosting crypto prices, but an overheated market could later face correction once inflation pressures resurface. In essence, XRP’s near-term rally potential depends not only on the cut itself but on how investors interpret the Fed’s broader tone—whether it signals a short-term stimulus or a sustained dovish stance. Technical Analysis: XRP Price Faces a Tight Squeeze XRP/USD Daily chart- TradingView The XRP price daily chart shows price holding just above the $2.04 zone, hugging the lower Bollinger Band range. The bands have tightened, signaling a phase of volatility contraction. Historically, such setups precede large directional moves. The middle band (SMA 20) around $2.11 acts as immediate resistance, while the upper band near $2.28 defines the ceiling for bullish expansion. The Heikin Ashi candles show mild indecision—smaller bodies and wicks on both sides—hinting at market hesitation. A…
Share
BitcoinEthereumNews2025/12/07 13:43