XRP Cycle Revealed: How Ripple Escrow Mirrors Oil Tactics

XRP continues to capture investor attention as fresh analysis reveals insights into a self-sustaining cycle that may shape Ripple’s long-term market trajectory. According to software engineer Vincent Van Code, XRP’s fixed supply, escalating demand, and expanding utility form a loop akin to classic economic cycles—making XRP an increasingly interesting player in the crypto market.

Unlike fiat currencies or tokens designed with infinite issuance, XRP is limited by a hard cap of 100 billion coins. No more coins will ever be generated, creating a reliable and transparent supply structure. This coin limit gives XRP a long-term valuation framework absent in inflationary ecosystems. Furthermore, over 14 million XRP have already been permanently destroyed via transaction fees, further lowering the total remaining assets in circulation. Van Code stressed that this deflationary aspect only contributes to XRP’s intrinsic scarcity.

Despite the 100 billion cap, less than 20 billion XRP are currently accessible for use. A significant amount of the supply is committed to long-term escrow contracts or held tightly by early adopters and institutional investors who rarely engage in daily trading. As Van Code noted, only a fraction of XRP is available on the open market or used in Ripple’s On-Demand Liquidity (ODL) system—now branded as Ripple Payments—highlighting a shortfall in readily available supply, despite the large nominal supply total.

This is where demand begins to exert its influence. Ripple Payments utilizes XRP for nearly instant settlement of international transactions, and its reach continues to grow. As institutions onboard to this service and use XRP for liquidity bridging, the demand for the token rises. Whether XRP is being acquired for speculative investment or for enterprise utility, the net result is increasing purchase pressure, often pushing the price upward.

Van Code emphasized that rising prices also reinforce investor confidence. As XRP appreciates in value, more holders are inclined to retain their tokens rather than liquidate them. This hodling behavior further reduces available circulating supply, intensifying scarcity and supporting even higher valuations.

Interestingly, Ripple Payments itself does not depend on XRP’s market price for functionality. Institutions perform buy-and-sell exchanges within seconds during each transaction, rendering the price almost irrelevant for operational use. Whether XRP trades at a fraction of a dollar or at a premium valuation, the system functions seamlessly. This pricing neutrality allows XRP to scale efficiently as a utility token for high-volume settlements across borders.

Van Code compared XRP to how financial firms such as BlackRock approaches Bitcoin ETFs. In BlackRock’s case, actual BTC isn’t moved or traded continuously; instead, it is used to generate value via fees and financial products. XRP differs in that its value is produced while in motion—in active use for transactions—creating utility-driven worth, not just speculative interest.

One of the most critical control mechanisms in the XRP economy is Ripple’s escrow system. Each month, Ripple unlocks a predetermined amount of XRP and unspent tokens are returned to escrow. This metered release schedule ensures that XRP is gradually introduced to the market without overwhelming the liquidity ecosystem. Van Code highlighted this method as a strategic tool tailored to prevent an abrupt supply increase that could destabilize Ripple’s evolving financial infrastructure.

Echoing that sentiment, Brad Kimes, founder of Digital Perspectives, publicly drew a bold comparison between Ripple’s escrow management and global oil regulation. “The XRP escrow will never let it all out into the wild,” said Kimes in a recent tweet, likening Ripple’s approach to OPEC’s strategy of controlling oil output to manage pricing stability across global markets. His view suggests that Ripple is actively ensuring long-term sustainability through controlled scarcity, just as oil-producing nations do with their barrels.

Related: XRP Price: $12M Max Pain for Bears

This orchestrated cycle—comprising fixed supply, escalating demand from utility, price-triggered investor psychology, and guided emissions through escrow—marks a unique positioning for XRP in the digital asset landscape. As more use cases are realized and more financial institutions align with Ripple’s Payment platform, XRP’s value proposition may become increasingly independent of short-term market trends and instead grounded in real-world demand and structured release schedules.