The XRP community is experiencing the effects of a significant increase in the cryptocurrency's circulating supply over the past few weeks. The notable changes were shared by technical analyst and blockchain developer Xaif.03.
Rise in XRP Circulating Supply
Between September 1 and 20, approximately 190 million XRP were added to the circulating supply. This has raised questions and concerns among holders and analysts regarding the implications for the digital asset’s price and overall market dynamics. Xaif.03 attached three images showing XRP’s circulating supply at $56.25 billion, $56.33 billion, and $56.43 billion.
Impact on XRP Market Dynamics
Concerns about sell-offs from Ripple board members have long existed. Adding such a significant number of coins to the circulating supply has renewed these concerns. An increase in supply without a corresponding rise in demand typically leads to price suppression. This phenomenon could explain the relatively stagnant price movement despite broader market rallies. As of the latest data, XRP remains one of the top cryptocurrencies by market cap, standing at approximately $34.1 billion.
What This Means for XRP?
The increase in circulating supply has also raised centralization concerns, further bolstered by a recent report showing that very few wallets perform over half of the transactions on the XRP Ledger (XRPL). Several factors could be driving the increase in circulating supply; however, the major factor is the monthly escrow releases.
The sharp increase in XRP's circulating supply raises questions and concerns about the future price dynamics and governance structure of the cryptocurrency. Holders and analysts will need to closely monitor further market changes.
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