thecryptobasic.com
$XRP community figure Zach Rector says the long-discussed $XRP supply shock is no longer just a meme but starting to materialize.
In a recent update, Rector noted that DeFi projects like Flare Network’s FXRP are now locking up massive amounts of $XRP. This implies the token’s freely tradable supply is shrinking faster than many realize.
Rector disclosed that he recently minted $100 worth of FXRP, on top of $90 minted last week, as part of his experiment with the Flare ecosystem.
A previous report from The Crypto Basic confirmed that more than $43 million worth of $XRP had already been bridged onto the network to mint FXRP as of October 8. Today, that figure has increased to $56 million at current market rates, representing roughly 20 million FXRP in circulation.
$56M $XRP is on Flare now.
— Hugo Philion ☀️ (@HugoPhilion) October 9, 2025
Notably, the project currently maintains a weekly minting cap of 5 million FXRP, which has been consistently sold out within hours. The first 5 million allocation was fully minted in four hours, and the most recent round reached its cap in just three hours.
This highlights the enthusiasm among $XRP holders seeking yield opportunities without selling their tokens.
Why This Matters for $XRP’s Circulating Supply
While each FXRP minted represents $XRP locked away on the $XRP Ledger, analysts argue that this process could significantly reduce the amount of $XRP available for trading.
Philion revealed that Flare aims to secure up to 5% of $XRP’s total supply through its FXRP system. This development aligns with widespread community warnings about an impending $XRP supply crunch.
Earlier, $XRP commentator Chad Steingraber suggested that only 21 million $XRP, comparable to Bitcoin’s total supply, may eventually remain available for public trading.
He highlighted that Axelar’s mXRP aims to manage $10 billion in $XRP, while Flare’s FXRP is targeting 5 billion $XRP by mid-2026. Combined, the two projects could lock up 8 billion $XRP, roughly 13% of the current circulating supply.
Shrinking Exchange Balances and Institutional Accumulation
The potential supply shock comes amid sharp declines in $XRP exchange balances. Coinbase, for instance, saw its $XRP reserves plunge by over 96% in less than three months.
Meanwhile, institutional interest is accelerating. Asset managers like 3iQ and REX-Osprey already hold millions of $XRP via ETFs. Additionally, as many as seven spot $XRP ETFs are launching soon.
Companies, including VivoPower and Wellgistics, have also announced plans to hold $XRP as a reserve asset.
The Beginning of the $XRP Supply Shock Era
According to Rector, this is “just getting started”. As more $XRP tokens go into DeFi protocols, institutional funds, and long-term reserves, the liquid supply available for open-market trading could dwindle fast.
Interestingly, hypothetical estimates suggest $XRP price could soar to four digits if only 21 million tokens are publicly available for trading.