Experts reject XRP Supply Shock Theory: Prevalent influence of Bitcoin stays.
The recent XRP Supply Shock theory has gained attention with many people in the XRP community stating that XRP will be able to reach a higher price point with declining availability of XRP on exchanges.
Proponents point to XRP tokens increasing from large holders to exchanges, and increasing demand from Ripple ETFs, stating that is a higher price point to be reached due to a scarcity effect. On the contrary, experts such as Bill Morgan argue that there is little to almost no relevance to the XRP demand and price movement.
Morgan has been noted as a Ripple Advocate and Lawyer, stating that the so-called XRP supply shock has no value when trying to explain the price movement with other economic factors. In his post on X, Morgan states that the price movement of XRP will be much more significantly correlated to the price movement of Bitcoin, and will be independent of the so-called supply shock theory.
Morgan’s comments come, with reports stating that over 1.5 billion XRP tokens have been moved across exchanges due to a change in investor focus and custodial arrangements.
In this context, the XRPL dUNL validator, VET, stated in a recent tweet that there is an incorrect assumption that there is currently a shortage of XRP on exchanges. VET stated that there are almost 16 billion XRP currently available on exchange platforms, emphasizing the market flexibility and availability of XRP.
This statement contradicts the argument that there is an adequate supply to sustain the market, but a severely constrained supply that would drive the price up significantly due to a supply gap.
Regardless of the majority of comments received, some analysts remain concerned about the market irrationality that may arise due to demand derived from ETFs. Since the approval of XRP ETFs in November 2025, it has been reported that the consumer market has captured $1.25 billion of net assets, resulting in a minor devaluation of the token supply on the consumer market. A prominent crypto analyst on X, unknownDLT, stated that the severe withdrawal of 750 million XRP to ETFs may result in a supply sensitive price effect by early 2025.
The reasoning is that, as the supply of tokens available to the exchanges diminishes, demand is likely to increase as prospective XRP buyers may perceive themselves to be in a limited supply situation, thereby losing the singular opportunity to acquire an XRP token. At the same time, inflows of new ETFs would potentially lessen the pressure to sell, thereby enhancing the potential for an increase in price.
Nevertheless, Bill Morgan is of the opinion that these situations could be overstated. He again reiterates, for something to be fundamental to the price of XRP, there has to be token activity (movement) and the demand for ETFs (Exchange-Traded Funds), and in XPRs case, these two things will not be the deciding factors.
It is, however, an accepted fact that the prices of XRP in the market will depend in most part of the trends in the market of crypto currencies (coins) in general, and the prices of BitCoin in particular.
Conclusion
To sum up, the narrative regarding XRP supply shock is understood to be more crypto hype than reality by leading experts, while most investors are looking at the price of XRP and seeing the scarcity of the tokens as the primary reason for the level of the tokens being offered for sale. However, these factors are speculative, and the primary reason that drives the price of XRP is the price of BitCoin.
