XRP holdings on leading exchange Coinbase have seen a remarkable decline, shrinking by an estimated 73% over time. This massive drop raises questions about investor sentiment and trading behaviors around Ripple’s native token.

Steep Drop in Exchange Wallet Reserves

Recent data reveals that XRP balances stored in Coinbase wallets have significantly decreased. This trend, signaling either large-scale withdrawals or waning user interest, shows a reduction from higher historic levels to just 361.7 million XRP—down from over 1.3 billion originated earlier in the year. This decline amounts to a roughly 73% reduction in stored tokens, highlighting dynamic changes in exchange-traded volumes and user activity.

Such outflows may suggest that investors are moving their XRP assets out of the platform to cold wallets for long-term holding or exploring alternative venues for trading. It’s also a potential sign that speculative activity surrounding XRP has cooled off in tandem with broader market consolidation.

Not Unique to Coinbase

While Coinbase shows a pronounced outflow, the trend isn’t exclusive. Other centralized exchanges also report a tapering of XRP reserves. This broader decline across platforms suggests an industry-wide shift, possibly influenced by growing adoption of decentralized custody solutions or the aftermath of regulatory pressures and legal scrutiny previously faced by Ripple Labs.

Some suggest the move could indicate rising trust in self-custody post legal wins for Ripple and greater awareness around the XRP Ledger (XRPL)‘s capabilities. Alternatively, it may be a reflection of profit-taking or dwindling speculative interest amid uncertain market directions.

What It Could Mean for XRP

Despite the reduced holdings on Coinbase, this does not necessarily signal a bearish turn for XRP. Instead, the shrinkage in exchange reserves is often interpreted as bullish, since it implies reduced selling pressure. When fewer tokens are readily available on exchanges, prices often face less downward momentum in the short term.

On-chain metrics and community sentiment can offer better context. Wallet growth and transaction volume on the XRP Ledger remain active, revealing continued use beyond what is captured by centralized exchange data alone.

XRP’s Ongoing Regulatory Journey

The XRP market continues to feel ripple effects from its historic battle with the SEC. However, Ripple’s partial legal win clarified XRP’s classification under certain conditions, removing some of the uncertainty. With the legal front stabilizing, activity across wallets—including those on decentralized platforms—is beginning to rebound, even as exchange-held supplies dwindle.

Rumors of Coinbase modifying its support for XRP due to shrinking user engagement remain speculative. There is no official confirmation suggesting Coinbase will delist or reduce access to XRP trading.

Strategic Shifts or User Trends?

It’s unclear whether Coinbase itself is reducing its XRP holdings as a strategic move or if traders are driving this change. The shift could be user-driven, with holders pulling funds off exchanges for safer storage, especially in regions emphasizing digital asset self-custody.

For investors and crypto watchers, the decline should prompt renewed attention to macro-level trends affecting XRP—such as court decisions, institutional use cases, and shifts in regulatory approaches across jurisdictions.

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

An abstract visualization capturing blockchain-based financial movement, symbolic of XRP withdrawal trends from exchanges like Coinbase.