XRP community researcher SMQKE has drawn attention to a statement from $100 billion asset manager, WisdomTree, suggesting XRP could face a supply shock well before Bitcoin.
For context, WisdomTree commented on XRP’s supply dynamics in a report last November, comparing the investment outlook for XRP and Bitcoin.
Meanwhile, in recent weeks, there have been increased discussions about XRP experiencing a supply shock soon. These commentaries are due to the back-to-back launch of DeFi yield opportunities for XRP and institutional accumulation.
Amid this, SMQKE referenced a statement from WisdomTree, noting that Bitcoin will reach its maximum supply of 21 million coins around the year 2140. This is over a century from now, but before then, BTC will continue to see issuance of new coins. In contrast, XRP will reach its full supply “within the next few years.”
How XRP Supply Model Works
Notably, this suggestion is based on the massive volume of XRP locked in escrow, with a monthly release.
Since 2017, Ripple has been releasing 1 billion XRP from escrow each month to provide markets with a predictable supply. It sends back to escrow tokens not distributed. This system will continue until the remaining 35.3 billion XRP in escrow is fully out.
Typically, as the company releases 1 billion XRP, it relocks about 700 million. Effectively, 300 million tokens enter the market per month, with minor variations in some months.
At this rate, analysts project that Ripple’s escrow could last approximately 9 years and 8 months, concluding around 2035. However, scenarios vary:
- 400M/month usage (starting 2026): depletion by 2033
- +100M/year usage increase (from 2026): depletion in 6 years
- No re-locking: escrow depleted in 3 years
Why Analysts Expect a Supply Shock
Once the escrow releases end, burned transaction fees will be the only factor reducing supply, meaning XRP’s total count will start to shrink permanently.
WisdomTree’s report highlighted how transaction fees on the XRP Ledger (XRPL) are systematically burned, gradually applying deflationary pressure to XRP’s total supply of 100 billion units. Since launch, over 14.2 million XRP have been permanently removed through this process.
In contrast, Bitcoin’s fixed 21 million supply will not be fully mined until around 2140, resulting in a much longer scarcity timeline. WisdomTree argues this makes XRP a strong complement to Bitcoin, offering near-term scarcity alongside fast and low-cost transactions.
Meanwhile, beyond burns, XRP community members warn of a looming supply crunch due to mXRP and FXRP projects from Axelar and Flare. These products plan to lock up to 13% (approximately 8 billion XRP) in DeFi activities.
Moreover, asset managers with longer-term views are also buying XRP as treasury assets. ETFs that invest in XRP are likely to arrive next month.
Based on this, calls for a supply shock have intensified, with many speculating on how it could impact XRP’s long-term price. Some use this theory to call for triple-digit XRP prices.
Diversified Crypto Exposure
WisdomTree’s report concludes that holding Bitcoin and XRP can help investors balance risk and tap into their unique strengths. Bitcoin is a long-term store of value, and XRP is an efficient, low-fee digital payment asset with approaching supply limits.
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.
