XRP News Today: Coinbase's XRP Cut Sparks Institutional Shift in Liquidity Strategy

Coinbase has drastically reduced its holdings of Ripple’s XRP by approximately 83% since June 2025, according to XRPWallets data. The exchange previously held around 970 million XRP across 60 cold and hot wallets, but as of September 2025, only 10 cold wallets remain, each containing about 16.5 million XRP coins [1]. The sharp decline has been attributed to a significant drop in demand for XRP on perpetual derivatives markets, particularly after the Chicago Mercantile Exchange (CME) introduced XRP into traditional leveraged trading environments. Analysts speculate that this shift may have redirected institutional flows through platforms like BlackRock’s Aladdin, potentially channeling XRP toward liquidity corridors, exchange-traded funds (ETFs), or trust structures. Some observers suggest that the move could also reflect a routine wallet consolidation strategy [2].

The reduction in Coinbase’s XRP reserves has placed the exchange at a disadvantage relative to its competitors in the XRP derivatives market. Bitget, Binance, Bybit, and CME all reportedly handle more than $1 billion in daily XRP trades, while Coinbase’s combined trading volume and open interest (OI) have yet to surpass $50 million, according to real-time data from CoinGlass. Meanwhile, rival exchange Gemini has introduced an XRP-powered card offering 4% cashback, further capturing attention among U.S. investors. This competitive gap may have prompted Coinbase to reduce its XRP holdings, particularly at the peak of $3.65, and to reposition the asset into on-chain liquidity environments, a key strategy for maintaining trading volume [3].

Analysts suggest that the move could signal a broader shift in institutional demand for XRP. The asset has been redistributed from exchange reserves to self-custodial holdings, potentially increasing scarcity and influencing price dynamics. Currently, XRP trades at approximately $2.78, down 1% on the week but up 60% on the month. Lower exchange reserves are expected to reduce selling pressure, potentially stabilizing or boosting the asset’s price. However, volatility remains, with key resistance levels near $0.42 and ongoing anticipation for ETF developments.

Investors are advised to closely monitor key market-moving factors such as BlackRock’s strategic moves, potential XRP ETF approvals, and Ripple’s periodic escrow releases. While Coinbase has not abandoned XRP entirely—continuing to support trading and custody—the reduction in reserves reflects a strategic reallocation rather than a full exit. This approach may align with broader institutional demand or the firm’s On-Demand Liquidity (ODL) network, which facilitates cross-border transactions. The implications for XRP investors remain mixed: tighter supply could support price growth if demand increases, but uncertainty persists around broader regulatory and market developments [4].

The ongoing reallocation of XRP from centralized exchanges to institutional and self-custodial environments could represent a structural change in how the asset is held and traded. With other major exchanges increasing their XRP reserves and derivatives volumes rising, the market appears to be evolving toward more diversified liquidity sources. This shift may reduce dependency on any single exchange and support XRP’s utility in cross-border payments and DeFi applications. However, long-term price stability will depend on broader adoption trends, regulatory clarity, and continued demand from both retail and institutional investors.

Source:

[1] Coinbase Dumps 83% XRP; Reserves Down From 60 To 10 Wallets (https://dailycoin.com/coinbase-dumps-80-xrp-reserves-down-from-60-to-10-wallets/)