Coinbase wallets holding XRP have dropped dramatically over the past three months, leading to mixed reactions among community members.
While XRP has continued to battle the bears at $3, the XRP holdings on Coinbase, America’s largest exchange, have witnessed a dramatic change over the past three months. Notably, Coinbase, which once had 970 million XRP in its cold wallets just three months ago, now only holds 98 million within these wallets.
For the uninitiated, an exchange uses cold wallets to store assets for the long term. These wallets usually hold customer deposits and reserve funds that the exchange doesn’t use for daily trading. On the other hand, hot wallets stay online and give the exchange quick access to funds for withdrawals and active trades.
Coinbase XRP Holdings Depleting
As of early June, Coinbase had up to 52 cold wallets holding XRP, according to findings from community pundit “XRP Liquidity,” who tracked these accounts at the time. The pundit confirmed that these 52 cold wallets held a total of 970 million XRP, currently worth $2.88 billion, with 10 wallets each holding 26.8 million XRP and 42 wallets each holding 16.8 million XRP.
However, since June, the cold wallets have persistently moved out millions of their XRP holdings. This is particularly strange, considering that cold wallets do not usually feature this much activity. Notably, such everyday movements are typical of hot wallets, which exchanges use for withdrawals and trading.
Interestingly, market tracking resource Whale Alert called attention to some of these transactions, with most of them, especially the ones from last month, involving 16M+ XRP. Recall that XRP Liquidity’s June analysis confirmed that up to 42 Coinbase wallets each held 16M+ XRP tokens.
While Whale Alert called these wallets “unknown,” on-chain data confirmed that they were actually Coinbase’s cold wallets.
Particularly, these cold wallets transferred the XRP tokens to Coinbase hot wallets, and then the hot wallets moved fractions to platforms such as Stake, Binance, and others, as well as unknown addresses. This indicates that the funds went toward meeting customer withdrawal requests.
Latest Transactions
The latest of these movements occurred on Sept. 13, when Coinbase (Cold 141) moved 16.5 million XRP to Coinbase (6), a hot wallet, at 18:59 UTC. The Coinbase (6) wallet has since used these tokens to meet withdrawal requests, currently holding just 35,924 XRP.
Amid the persistent outflows from Coinbase wallets, the exchange now has only six cold wallets on the XRPL, down from 52 in June, according to data from XRPScan. Notably, each of these wallets holds 16M+ XRP, totaling 98.81 million tokens. This represents an 89.8% drop from the 970 million XRP from June.
At press time, there have been no announcements from Coinbase on the reason behind these movements, and they have not yet replied to a request for comment from The Crypto Basic.
Notably, some XRP community figures have suggested that large whales are behind the movements, projecting an imminent supply shock that could push prices to targets around $10. However, these comments remain unconfirmed as of this press.
DisClamier: This content is informational and should not be considered financial advice. The views expressed in this article may include the author's personal opinions and do not reflect The Crypto Basic opinion. Readers are encouraged to do thorough research before making any investment decisions. The Crypto Basic is not responsible for any financial losses.
