Quick Read
- Binance’s XRP reserves have dropped to a record low after a 300 million token withdrawal since October 2025.
- Investors are moving XRP into private wallets, signaling long-term holding despite recent price declines.
- XRP price is struggling, down 17% in the last month, even as supply on exchanges falls.
- Large holders have sold over 180 million XRP, increasing selling pressure.
- Analysts warn that failing to hold above $2.00 could trigger further declines.
XRP Exchange Reserves Hit Record Low, Sparking Supply Shock Speculation
In late 2025, XRP has captured headlines for a dramatic shift in its market dynamics. According to CryptoPotato, Binance—the world’s largest cryptocurrency exchange—now holds its lowest XRP reserves in history, sitting at approximately 2.7 billion tokens. This plunge followed a massive withdrawal of nearly 300 million XRP since October 6, signaling what analysts refer to as a classic “supply shock” scenario. When the supply of a token on exchanges drops sharply, it often sets the stage for rapid price movements—especially if demand surges.
The trend is clear: investors are pulling their XRP out of exchanges and moving them into private wallets, a strategy typically associated with long-term conviction rather than short-term trading. On-chain analyst Darkfost highlighted this exodus as a positive sign, suggesting that holders anticipate future gains and prefer to safeguard their assets away from the volatility of trading platforms.
Investor Behavior: Long-Term Holding vs. Short-Term Volatility
This mass migration off exchanges is not occurring in isolation. Data from Arab Chain reveals that the ratio of XRP on exchanges compared to its total supply has dropped to its lowest point this year. Such accumulation by investors often precedes bullish market moves—but the current price action tells a more nuanced story.
Despite the supply squeeze, XRP’s price has struggled. It’s currently trading near $2.19, virtually unchanged over 24 hours, up 3.5% over the past week, but down more than 12% in two weeks and a steep 17% in the past month. Open interest for XRP futures on Binance has also collapsed to a one-year low, according to a recent CryptoQuant report, suggesting a decline in speculative trading activity. Even the much-anticipated launch of spot XRP ETFs in mid-November failed to ignite a rally, as “whales”—large holders—sold off over 180 million tokens, adding downward pressure.
Technical analysts, like Ali Martinez, are closely watching the $2.00 support level. If XRP fails to hold above this key threshold, it could trigger further declines, erasing recent gains and undermining the bullish sentiment among holders.
XRP’s Valuation: Overinflated or a Sleeping Giant?
The question on many investors’ minds is whether XRP’s current market cap—$132 billion as of late November—is justified. In a recent analysis by The Motley Fool, the author argues that XRP’s valuation is “wildly overvalued” following a speculative surge last winter. Although the resolution of the long-standing SEC lawsuit has removed a major obstacle, RippleNet is still just one player in a vast, competitive border-crossing payments landscape. The scale of business traction required to validate XRP’s present valuation will likely take years to materialize.
To put it into perspective, XRP’s market cap places it ahead of established financial firms like Robinhood Markets and just below BlackRock—a comparison that highlights its ambitious reach but also exposes the gap between current reality and future promise. As the article notes, XRP “simply isn’t ready to rub financial shoulders with these industry giants yet.” The author suggests that unless XRP drops below $1.00—a 54% decrease from current levels—investors may be better off reallocating gains to Bitcoin, which has demonstrated more robust fundamentals and long-term resilience.
Bitcoin vs. XRP: Where Does the Smart Money Go?
While both Bitcoin and XRP have charted parallel price paths in 2025, their trajectories have diverged. Bitcoin, valued at $1.74 trillion, fell by 7% this year, whereas XRP is up by 6%. However, both have underperformed the S&P 500, which rose 16% over the same period. The broader crypto market has been hit by macroeconomic turbulence, chiefly driven by central bank interest rate policies, tariffs, and labor market data. These headwinds have prompted investors to retreat from riskier assets like cryptocurrencies, leading to sharp price corrections.
Bitcoin’s established network effects and near-unbeatable economies of scale make it a compelling long-term investment, according to The Motley Fool. Its four-year halving cycle typically signals impending price jumps, though the current economic environment has disrupted this pattern. By contrast, XRP remains a “tiny drop in an ocean of border-crossing payment options,” with its utility and adoption still in the early stages.
In the short term, XRP’s supply shock on exchanges could create conditions for a price rally if demand rebounds. Yet, with institutional selling, waning speculative interest, and uncertain price support, the asset’s future remains clouded.
The Road Ahead: Opportunity or Overhype?
So, is XRP a hidden gem or a speculative bubble waiting to burst? The reality is more complex. The shrinking exchange reserves and steadfast accumulation by long-term holders suggest that confidence in XRP’s future remains strong among its core community. However, the disconnect between supply metrics and price performance, coupled with ongoing selling by whales and institutional investors, points to unresolved uncertainty.
For investors, the key takeaway is caution. XRP’s business impact is still hard to measure, and while the supply shock narrative is enticing, it’s not a guarantee of imminent price gains. The market is watching the $2.00 level closely; a break below could signal further declines, while a surge in buyer demand could rapidly reverse the current trend.
Assessment: The XRP market in 2025 is defined by contradictions—a supply shock setup amid weak price performance, strong long-term holder conviction but persistent institutional selling, and a lofty valuation unsupported by current adoption. For now, XRP’s promise is real but unproven, and investors should weigh its speculative appeal against the enduring strength of Bitcoin’s fundamentals. The next chapter will be written not by sentiment, but by actual utility and adoption in the world of cross-border payments.