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A new discussion is emerging within the XRP community about what will truly drive XRP’s price in 2026.
While many point to transaction volume on the XRP Ledger (XRPL), a prominent XRP analyst believes the real driver may lie elsewhere.
Transaction Volume May Not Be the Main Catalyst
The popular argument is that higher transaction volume on the XRPL will naturally push XRP’s price higher. However, critics of this view note that XRP settles transactions in just a few seconds. Because money moves through the network so quickly, large transaction volumes do not necessarily require a large amount of XRP to be held at any given time.
In simple terms, fast settlement reduces the need for XRP to sit idle, limiting the price impact of pure transaction activity.
Supply Lockup Could Be the Key
According to analysis shared by All Things XRP, supply lockup is becoming a more important factor. Instead of XRP being used and released quickly, more XRP is now being locked or held within different systems.
Several trends support this idea:
- mXRP DeFi products are targeting up to $10 billion worth of locked XRP
- The Flare Network aims to lock around 5 billion XRP by mid-2026
- XRP ETFs are already holding more than 500 million XRP
- Exchange reserves continue to decline, reducing the readily available supply
These developments are not about transaction speed or usage. They represent XRP removed from the active trading supply for extended periods.
Shrinking Tradeable Supply Changes the Equation
When the amount of XRP available for trading decreases while demand remains steady or grows, basic supply-and-demand dynamics come into play. A shrinking tradeable float can create upward price pressure, even without explosive growth in daily transaction counts.
This is why some analysts believe the focus should shift from usage metrics to changes in XRP’s supply. While the supply-shock narrative is still developing, supporters argue that it becomes more plausible with each new lockup milestone.
Meanwhile, some critics note that despite growing discussion of an XRP “supply shock,” on-chain data does not fully support the narrative.
XRP Supply Shock Claims Lack Data Support
Proponents often cite declining exchange balances, particularly on Binance, as a bullish signal. However, recent data shows that exchanges still collectively hold 15.4 billion XRP across 26 platforms.
Upbit leads with 6.25 billion XRP, followed by Binance with 2.52 billion and Bithumb with 1.82 billion, indicating that ample liquidity remains.
Legal expert Bill Morgan criticized the supply-shock thesis, noting that exchange-held XRP accounts for about 15% of total supply and roughly 25% of circulating supply — far from scarcity. He also dismissed the impact of spot XRP ETFs, which hold less than 1% of total supply.
Morgan and other commentators argue that with billions of XRP readily tradable and easily moved to exchanges, the conditions for a true supply shock — and a sharp price spike — are not currently in place.