XRP Price: What Will Drive It in 2026?

What to Know:

• Debate centers on whether XRP price appreciation will be driven by transaction volume or supply lockup.
• Broader context involves understanding how tokenomics and market structure impact digital asset valuations.
• This matters for XRP as it highlights the importance of supply dynamics for institutional flows.

A debate is brewing within the XRP community regarding the primary catalyst for XRP’s potential price surge in 2026. While increased transaction volume on the XRP Ledger (XRPL) is often cited, some analysts propose that supply dynamics may play a more critical role. Understanding these factors is crucial for institutional investors navigating the digital asset landscape.

Transaction Volume vs. Supply Dynamics

The conventional wisdom suggests that higher transaction volume on the XRPL will naturally drive XRP’s price upward. However, this view is challenged by the rapid settlement times of XRP transactions. The argument is that because funds move through the network so quickly, high transaction volumes do not necessarily require a substantial amount of XRP to be held for extended periods, thus limiting the price impact.

The Case for Supply Lockup

An alternative perspective, highlighted by analysts such as All Things XRP, posits that supply lockup is becoming a more influential factor. This theory suggests that instead of XRP being rapidly used and released, an increasing amount is being locked or held within various systems, reducing the available supply. Several trends support this idea:

• mXRP DeFi products aiming to lock up to $10 billion worth of XRP.
• The Flare Network targeting approximately 5 billion XRP locked by mid-2026.
• XRP ETFs already holding over 500 million XRP.
• Decreasing exchange reserves, further reducing readily available supply.

These developments focus on removing XRP from the active trading supply for extended periods, rather than transaction speed or usage.

Shrinking Tradeable Supply and Price Pressure

The core argument is that a decrease in the amount of XRP available for trading, coupled with steady or increasing demand, will trigger classic supply-and-demand dynamics. A contracting tradeable float can exert upward pressure on the price, even without significant growth in daily transaction counts. This perspective suggests a shift in focus from pure usage metrics to changes in XRP’s supply. While the “supply shock” narrative is still developing, proponents argue its plausibility increases with each new lockup milestone.

Counterarguments and Data Analysis

Critics of the supply shock thesis point to on-chain data that does not fully support the narrative. For instance, despite discussions of declining exchange balances, data indicates that exchanges still collectively hold a substantial 15.4 billion XRP across 26 platforms. Upbit leads with 6.25 billion XRP, followed by Binance with 2.52 billion and Bithumb with 1.82 billion, indicating that ample liquidity remains.

Expert Opinions and Market Realities

Legal expert Bill Morgan has critiqued the supply-shock thesis, noting that exchange-held XRP accounts for roughly 15% of the total supply and about 25% of the circulating supply—far from scarcity. He also downplays the impact of spot XRP ETFs, which hold less than 1% of the total supply. With billions of XRP readily tradable and easily moved to exchanges, the conditions for a true supply shock—and a sharp price spike—may not currently be in place. These counterarguments highlight the complexities of predicting price movements based solely on supply metrics.

Ultimately, the primary driver of XRP’s price in 2026 remains a subject of debate. While supply dynamics and lockup mechanisms could play a significant role, substantial exchange reserves and differing expert opinions suggest a more nuanced outlook. Institutional investors should carefully weigh both transaction volume and supply-side factors when evaluating XRP’s potential.

Related: Bitcoin, Ethereum Show Gains as Traders Look to 2026

Source: Original article