- Edoardo Farina forecasts potential XRP supply shock.
- Binance XRP reserves drop 82 million tokens year-to-date.
- Exchange reserves dropping 183 million XRP.
XRP community commentator Edoardo Farina has predicted a timeline for when XRP supply on exchanges could dramatically decrease, potentially creating a supply shock scenario. According to the founder of Alpha Lions Academy, this development might come to pass by 2030, or roughly five years from today.
Farina’s remarks coincide with XRP’s poor pricing performance in recent months. Since dropping from its $3.3 peak in mid-January, the token has consistently traded in the lower $2 range, disappointing investors while Bitcoin reaches new all-time highs.
According to Farina, a supply shock could trigger the type of rally XRP investors have been waiting for. According to him, the quantity of XRP tokens that are offered on exchanges may decrease to the point where they almost “disappear,” making it difficult for investors to buy tokens because of their scarcity.
Binance XRP reserves show declining trend
The idea that exchange reserves are depleting is supported by data from CryptoQuant. This year, Binance’s holdings of XRP have dropped by 82 million tokens, from 2.939 billion to 2.857 billion at now.
Even if this rate of depreciation is still quite low, it supports a trend of declining reserves that analysts have been observing. In its investigation last month, EgyHash noticed this trend, pointing out that Binance’s XRP reserve had dropped to levels last observed in July of the previous year.
The declining reserve pattern has been documented since March. The Binance XRP reserve first increased from 2.939 billion tokens on January 1 to 3.040 billion tokens on January 16, which corresponded with XRP’s ascent to a seven-year high of $3.3, according to CryptoQuant data.
This increase likely occurred as investors transferred tokens to Binance to capitalize on the price surge and take profits. However, following the January 16 peak of 3.040 billion tokens, reserves began declining alongside XRP’s price retracement.
On February 28, the reserve dropped to 2.72 billion tokens, but on March 2, it had risen to over 2.9 billion. Although there have been more variations since then, the general tendency has remained downward. Reserves have fallen by 183 million coins from the peak on January 16.
Farina’s prediction of a supply shock by 2030 assumes the current trend of declining exchange reserves will accelerate or continue at a steady pace. A supply shock occurs when available tokens for purchase become severely limited, potentially driving prices higher as demand exceeds readily available supply.
