How could the XRP price react if burns from the Ripple escrow reduce the token’s total supply by 20%?

Right now, XRP boasts a massive total supply of 99.9 billion tokens. Notably, about 60 billion of those tokens already circulate in the market, while 35 billion remain locked in escrow under Ripple’s control. 

However, this supply situation has long triggered discussions within the XRP community. Specifically, some believe Ripple should burn the escrowed tokens, arguing that doing so could drive the price higher and ease concerns about supply centralization. Still, no one knows for sure how such a move would affect XRP’s value.

The Potential Impact of a 20% Supply Burn

As a result, we asked Google Gemini what might happen if Ripple burned 20% of XRP’s total supply. In response, Gemini presented a hypothetical model but clarified that the prediction was entirely theoretical. It explained that the outcome would depend on real-world factors like investor demand, token utility, and regulation, not just on a reduction in supply.

In the hypothetical scenario, Gemini assumed there was a 20% burn of the total supply, roughly 19.98 billion tokens. This would drop the total supply from 99.9 billion to about 79.92 billion. 

Notably, if all the burned tokens came from escrow, the pool would drop from 35 billion to roughly 15.02 billion XRP. However, the number of tokens in circulation would stay the same at 60 billion since the burn would only affect tokens locked in escrow.

Gemini noted that this wouldn’t immediately change the number of tokens being traded, but it would massively reduce future supply. According to the chatbot, this kind of reduction could create long-term bullish pressure because a smaller available supply tends to boost value when demand holds steady or grows.

Bullish XRP Price if Escrow Burns Reduce Supply by 20%

From here, Gemini presented what it called an “ultra-bullish” scenario. In this scenario, the burn leads to strong market excitement, regulators offer clear support, and the XRP Ledger sees higher adoption. 

Under these perfect conditions, Gemini suggested that XRP’s market cap could surge to around $4 trillion. This figure would represent almost a 28x jump from XRP’s current $144 billion market cap. For context, the broader crypto market cap today hovers around $4 trillion.

Using this assumption, Gemini calculated a potential new price for XRP by dividing the projected $4 trillion market cap by the circulating supply of 60 billion tokens. The result came to about $66.67 per XRP. This represents a dramatic increase from today’s $2.40 level, representing a 27.8× rise.

Gemini noted that this isn’t a forecast, but a theoretical assessment to show how massive a major supply cut could be if the market reacted positively. However, Ripple CTO David Schwartz had in the past suggested that a burn might not impact XRP price at all, citing a similar effect from Stellar’s supply burn in 2019.

A recent Glassnode report has identified one factor contributing to pressure on the XRP price, as long-term holders ramp up profit-taking trades.

The latest disclosure comes on the back of the ongoing struggles the market has faced over the past few days, despite clear macro tailwinds such as the recent Federal Reserve 25-bps rate cut, confirmation of an end to quantitative tightening in December, and easing trade tensions between China and the U.S.

Even with these favorable conditions, the total crypto market has lost $170 billion over the last four days, relinquishing the $4 trillion valuation mark. While XRP has been a victim of the market-wide collapse, it appears to be showing greater resilience than most, up more than 1% over the past 24 hours.

With XRP struggling at current prices, Glassnode recently confirmed that profit-taking trades from long-term holders have been contributing to the pressure. According to the market analytics platform, long-term holders who bought XRP before its November 2024 breakout have ramped up profit-taking since August 2025.

XRP’s Struggles Before the November 2024 Breakout

For context, before November 2024, XRP traded below $1 following the collapse of the Terra ecosystem in May 2022. The altcoin spent over two years changing hands between $0.4 and $0.6 most of the time, with occasional swings to $0.8 and periodic dips to $0.3. 

Interestingly, during this time, while others wrote XRP off, some investors leveraged the price dip to accumulate more tokens at lower prices. Following the impressive 281% surge in November 2024, which pushed prices toward $2, these long-term holders who bought before the breakout are now sitting on massive gains.

Long-Term XRP Holders Ramp up Profit-Taking

Now, some of them have begun engaging in profit-taking trades, especially as the XRP price faces a prolonged period of stagnation around $2. According to Glassnode, these investors had been offloading an average of $36 million worth of XRP every day. 

However, after XRP collapsed from the $3.66 peak in mid-July and a recovery attempt in early August failed to gain momentum, long-term holders ramped up their profit-taking trades by about 580%, increasing from an average of $36 million sold per day to around $260 million. 

Data from the accompanying chart confirms this disclosure. Notably, after a sudden spike in profit-taking trades during the rally in November 2024 to January 2025, the selloffs toned down from February to July. However, after the rally and correction in July, profit taking spiked above $500 million per day in early August before settling at the current $260 million figure.

XRP Seeing Lower Highs and Lower Lows

The impact on XRP price has been obvious. Specifically, since the fallout in July, XRP has been witnessing lower highs and lower lows. This has led to the formation of a descending channel on the daily chart. 

Notably, if this profit-taking volume reduces and whales ramp up buying, XRP could observe the much-needed recovery above this channel, especially on the back of a broader market rebound. Most analysts already believe Bitcoin (BTC) and the crypto market could stage a recovery campaign in November.

A well-known analyst has identified the crucial area XRP would have to pull back to before it can stage a full recovery to previous highs.

For context, XRP has been trying to regain its footing after the sharp drop on Oct. 10, but the recent weakness across the broader crypto market has slowed its recovery. Despite supportive macro factors, such as the latest interest rate cuts from the U.S. Federal Reserve, XRP’s price is seeing another pullback after briefly rebounding. 

Still, it continues to hold above $2.5, and several analysts believe this shows XRP is setting up for one last correction before it begins another strong move toward $3 and beyond.

XRP Trading Within Large Descending Channel

Market analyst DustyBC remains one of the few championing this narrative. In a recent analysis, he noted that XRP continues to follow its expected path and highlighted a key price range that could mark the end of the current correction. 

Data from his 8-hour XRP/USD chart shows that XRP has been trading inside a descending channel since it fell from $3.66 on July 18. Within this larger setup, XRP also formed smaller patterns, including a secondary descending channel and an ABCDE correction, which ended when the price dropped to $2.3 on Oct. 10.

The chart indicates that the drop completed the ABCDE correction and started a new Elliott Wave structure, which now overlaps with another ABC correction. 

Notably, the recovery to $2.64 on Oct. 13 marked the end of Wave 1, while the decline to $2.29 on Oct. 17 formed wave A of the ABC correction. From there, XRP bounced back to $2.69 on Oct. 27, completing wave B. Since then, XRP has started to retreat again, in line with DustyBC’s expectation of one final dip.

Level XRP Must Drop to Before Full Recovery

The chart further shows that this current pullback could complete both the C wave of the ABC correction and Wave 2 of the ongoing Elliott Wave structure. Specifically, he circled a price zone between $2.08 and $2.33 and described it as the level XRP needs to revisit before it can build strength for the next rally. 

Once XRP reaches this area, he expects the correction to end and Wave 3 to begin, a move he believes will push XRP above the descending channel and drive it past $3, possibly retesting the $3.5 region.

Interestingly, another analyst, Casi Trades, shares a similar outlook. She said XRP looks ready for its final drop before a major rebound. According to her, XRP turned bearish after rejecting Wave 4 resistance near $2.68, while the RSI formed a new low, confirming that Wave 5 of the correction has started.

Casi pointed out three main support levels on Coinbase at $2.42, $2.03, and $1.65. She explained that a break below $2.42 would likely confirm more downside toward $2.03 and $1.65, with the last level aligning with the macro 0.618 Fibonacci retracement. 

She expects the price to bottom out around this zone before a strong Wave 3 impulse begins, which could send XRP quickly through resistance levels and toward new highs.

A Familiar Response to Fed Rate Cut

Meanwhile, as XRP and the broader market continue to correct despite the Federal Reserve’s latest rate cut, Dark Defender pointed out that XRP showed similar behavior before its last major rally. 

On September 18, 2024, the Fed cut the rates by 50 bps. #XRPArmy was dead silent, as was the rest of the Crypto communities.

XRP was at $0.50 before the $3.66 run!

We addressed the Bull Run 6 weeks before the Surge.

Now, the Fed cut the rates by 25
We have the same panic

We… https://t.co/efK0OLCKfn

— Dark Defender (@DefendDark) October 30, 2025

He noted that when the Fed cut interest rates by 50 basis points on Sept. 18, 2024, XRP traded near $0.50, and the market’s lack of excitement came just weeks before its surge to $3.66. With the Fed’s recent 25-basis-point cut, he suggested that another rally could form before the next Fed meeting.