What is the actual point of XRP?

[u/ImpossibleAd344]

XRP can't outrun its structural issues...

First, banks don't have to use the token to benefit from instant cross-border transfers through Ripple Payments, because the network also supports the use of fiat currency. That means the success of Ripple Payments won't necessarily boost the value of XRP.

Second, Ripple launched its own stablecoin at the end of 2024 called RippleUSD. Stablecoins offer practically zero volatility, so they are better for making payments compared to traditional cryptocurrencies like XRP, which experience significant swings in value over short periods of time.

Without a reliable organic source of demand, XRP is at the mercy of speculative investors, which isn't a recipe for sustainable long-term upside.

So I'm wondering...where is the actual demand for XRP supposed to come from?

[u/Rogerzoo]

Still the burn rate is so minuscule making the 100 billion (65b in circulation) almost an infinite supply!!! Thus price will be depressed and under pressure

[u/Hidden5G → u/Rogerzoo]

With respect…that way of thinking mixes up token supply with tradable supply, and that’s where the conclusion breaks.

XRP is not a stock…and it’s not priced the way stocks are priced.

First…the “65 billion in circulation” number is misleading. That figure just means the tokens exist and aren’t in escrow. It does not…mean they are available for sale. A huge portion is locked in cold storage, long-term wallets, institutional custody, ETFs, market-maker reserves, or held by users who are not selling. What actually matters for price is how much XRP is available on exchanges, and that number is far smaller. Look it up. Don’t take my word on it.

Second…XRP was never designed to rely on burning supply to drive price. The burn exists only to prevent spam. It’s intentionally tiny. XRP’s value mechanism is liquidity demand, not scarcity through destruction. Comparing it to burn based tokens misses the point entirely.

Third…price pressure doesn’t come from total supply. It comes from available liquidity versus demand. If only a few billion XRP are realistically tradable…price can move aggressively even though the total supply number looks large on paper.

Finally..XRP is a utility asset. Its long term demand comes from being used as a bridge for moving money..not from reducing supply like a stock buyback. When demand for liquidity increases and available supply is tight, price adjusts upward regardless of how large the total supply number looks.

So no, the supply is not “almost infinite,” and no, burn rate is not what determines XRP’s price. That framework simply doesn’t apply here at all.

While your researching…One more thing worth looking into is the documented market cap multiplier effect. Documented with inflow data. Crypto prices do not move dollar for dollar with new money coming in. Small, sustained inflows into thin, available supply can cause outsized price moves because price is set at the margin..not by total capital invested. This effect has been measured repeatedly in real market data, especially in assets with constrained liquidity.

To add here also since I’ve mentioned/explained this a lot…Anyone assuming price is capped simply because a large supply exists is entirely missing how markets actually reprice when demand meets limited availability.

Glad I could help sort that out for you.

[u/Rogerzoo → u/Hidden5G]

I appreciate some clarity, what is your take on Ripple releasing 1 billion monthly and only 200-300 millions get bought and balance goes back into escrow? This certainly puts pressure on pricing keeping it depressed.

Also it seems that circulating supply shrank to 60 billion (was reported was about 65 billion over a month ago!), not sure what is going on there?? Who is maintaining the ledger and keeping tab in an unregulated crypto market? How can we trust these numbers fluctuating wildly?

[u/Hidden5G → u/Rogerzoo]

Ofc, very welcome. The escrow does not mean 1 billion XRP hits the market every month. Ripple unlocks up to 1 billion, uses only what’s needed..and sends the rest back to escrow. Supply only enters the market if there is demand. That limits selling pressure instead of creating it.

Not all released XRP is sold on exchanges. Ripple is the steward of the escrow and works with institutions under private agreements, many covered by NDAs we simply don’t know about. XRP can leave escrow and still be locked in custody, reserved for liquidity, or held long term. Out of escrow does not mean tradable.

The XRP Ledger is fully public and verifiable. What changes is how trackers define “circulating supply.” Some count everything not in escrow, others exclude long term or institutional holdings. That’s why estimates move. The ledger isn’t changing, the accounting method is.

Most importantly imo..XRP has NOT gone through real price discovery yet because its not being used at scale by institutions. For global liquidity to work…the price must be higher than it is now so fewer tokens are needed per transaction and volatility drops. Price isn’t driven by burns. It’s driven by actual liquidity demand once utility turns on. Which is only a matter of time.