The cryptocurrency market is a world of constant speculation, and a recent rumor has captivated the XRP community: Is the true circulating supply of XRP far lower than what’s commonly reported? This question was recently explored in a video titled “Is The True Circulating Supply Of XRP Shockingly Low?” which delved into a potential “supply shock” for the digital asset.

The Great Discrepancy: CoinMarketCap vs. XRP Scan

In the video, Nick highlighted a notable difference in the reported circulating supply of XRP between two major data sources. While CoinMarketCap showed a circulating supply of approximately 59.6 billion XRP, the blockchain explorer XRP Scan reported a higher figure of around 64.7 billion. This discrepancy, it was explained, stems from how each platform accounts for tokens. XRP Scan likely includes tokens held in escrow, which CoinMarketCap may not.

Ripple’s Escrow and the “True” Circulating Supply

A key factor in this discussion is Ripple’s escrow system. Ripple, the company behind XRP, holds a significant portion of the total supply—around 35.3 billion tokens—in an escrow account. These tokens are not actively traded on the open market and are released on a fixed schedule.

Taking this into account, along with the large holdings of institutions and so-called “whales” who are not actively trading their XRP, Nick suggests that the “true” freely trading supply of XRP could be a surprisingly low 20 to 30 billion.

The Potential for a “Supply Shock”

This limited supply could have a significant impact on XRP’s future. The concept of a “supply shock” is introduced, suggesting that if demand for XRP were to suddenly increase—for example, due to its use as a settlement layer for the tokenization of real-world assets—the limited number of available tokens on the open market would not be able to keep up.

This imbalance between high demand and a limited supply could drive the price of XRP up dramatically, as large players like financial institutions or governments rush to acquire the digital asset.