Prominent analyst Cheeky Crypto, with 203,000 followers on YouTube, recently sought to investigate a rumor suggesting that XRP’s circulating supply could “vanish overnight.” While the conclusion reached was more nuanced than the sensational headline, it raised critical points about the nature of XRP’s liquidity and availability in the market.
The video begins with Cheeky Crypto expressing skepticism regarding the claim, acknowledging its seemingly outrageous nature. Rather than dismissing the rumor outright, he aimed to scrutinize it and reconcile a common critique of XRP—its purportedly excessive supply—with a new perspective gaining traction within the community. This perspective suggests that a significant portion of the circulating supply may not be genuinely available for trading.
To kick off his analysis, Cheeky Crypto examined data from various sources. CoinMarketCap reported about 59.6 billion XRP as circulating, while XRPScan noted around 64.7 billion—highlighting discrepancies in how different platforms define “circulating supply.” He explained that the higher figures often include accounts that aggregators label as restricted, particularly Ripple’s programmatic escrow.
He drew attention to the fact that Ripple currently has 35.3 billion XRP held in escrow across multiple wallets, with a structured release plan of up to 1 billion each month. While these coins are accounted for on the ledger, they do not exist on exchanges, making them unavailable for immediate purchase. In his opinion, this escrow stash should be viewed as effectively off the market.
As the discussion evolved, Cheeky Crypto shifted focus from the general circulating supply to a more intricate concept known as effective float. He emphasized that numerous large holders, including banks and other major entities, may be retaining substantial amounts of XRP that further diminish available trading inventory. After analyzing these factors, he suggested that the truly liquid XRP supply might be in the range of 20 to 30 billion, significantly smaller than the previously cited figures.
Central to his analysis is the potential for a supply shock if demand for XRP suddenly spikes without a corresponding increase in the available supply. Cheeky Crypto posited that market dynamics are fundamentally based on supply and demand; if institutional users or large-scale investors require XRP when it’s not readily available, prices could rise sharply, potentially in a volatile manner.
He elaborated on how such a supply shock might materialize by tying it to developments in tokenization—an evolving trend in finance that involves the on-chain representation of various assets such as debt, stablecoins, and even gold. He cited Ripple’s intention to position the XRP Ledger as a critical settlement layer for these assets. The prospect of “trillions of dollars in value” being settled on the XRPL could substantially tighten the effective supply of XRP available in the market.
To illustrate his point, he employed two analogies. The first involved concert tickets: if 100,000 tickets existed, but 50,000 were held by promoters (escrow) and an additional 30,000 by corporate entities (whales), only 20,000 would be available for the public. In the event of overwhelming demand, prices would skyrocket. The second analogy referenced Bitcoin’s halving, suggesting that while XRP doesn’t have a set halving schedule, a rapid adoption could function similarly by effectively reducing the available supply.
Despite his compelling arguments, Cheeky Crypto refrained from providing specific price targets or timelines, emphasizing the inherent risks in the cryptocurrency domain. He reminded viewers that markets are highly volatile and that the phenomenon of tokenization could emerge on alternate platforms or evolve more gradually than enthusiasts hope, leaving the possibility of a sudden supply shock uncertain.
In conclusion, while the idea that XRP’s supply could “vanish overnight” was simplistic, Cheeky Crypto’s analysis highlighted the complexities of the circulating supply landscape. His investigation revealed that the effective float of XRP might be significantly lower than generally accepted figures and that a burgeoning demand driven by tokenization could put pressure on this float. “The change could actually be very sudden,” he acknowledged, capturing the essence of an evolving market landscape as XRP traded at $3.0198 at the time of the report.
