How could the XRP price react if burns from the Ripple escrow reduce the token’s total supply by 20%?
Right now, XRP boasts a massive total supply of 99.9 billion tokens.
Notably, about 60 billion of those tokens already circulate in the market, while 35 billion remain locked in escrow under Ripple’s control.
However, this supply situation has long triggered discussions within the XRP community.
Specifically, some believeRipple should burn the escrowed tokens, arguing that doing so could drive the price higher and ease concerns about supply centralization.
Still, no one knows for sure how such a move would affect XRP’s value.
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The Potential Impact of a 20% Supply Burn
As a result, we asked Google Gemini what might happen if Ripple burned 20% of XRP’s total supply.
Inresponse, Gemini presented a hypothetical model but clarified that the prediction was entirely theoretical.
It explained that the outcome would depend on real-world factors like investor demand, token utility, and regulation, not just on a reduction in supply.
In the hypothetical scenario, Gemini assumed there was a 20% burn of the total supply, roughly 19.98 billion tokens.Thiswould drop the total supply from 99.9 billion to about 79.92 billion.
Notably, if all the burned tokens came from escrow, the pool would drop from 35 billion to roughly 15.02 billionXRP.
However, the number of tokens in circulation would stay the same at 60 billion since the burn would only affect tokens locked in escrow.
Gemini noted that this wouldn’t immediately change the number of tokensbeing traded, but it would massively reduce future supply.
According to the chatbot, this kind of reduction could create long-term bullish pressure because a smaller available supply tends to boost value when demand holds steady or grows.
Bullish XRP Price if Escrow Burns Reduce Supply by 20%
From here, Gemini presented what it called an “ultra-bullish” scenario.
In this scenario, the burn leads tostrongmarket excitement, regulators offer clear support, and the XRP Ledger sees higher adoption.
Under these perfect conditions, Gemini suggested that XRP’s market cap could surge to around $4 trillion.
This figure would represent almost a 28x jump from XRP’s current $144 billion market cap.
For context, the broader crypto market cap today hovers around $4 trillion.
Using this assumption, Gemini calculated a potential new price for XRP by dividing the projected $4 trillion market cap by the circulating supply of 60 billion tokens.
The result came to about $66.67 per XRP.Thisrepresents a dramatic increase from today’s $2.40 level, representing a 27.8× rise.
Gemini noted that this isn’t a forecast, but a theoretical assessment to show how massive amajorsupply cut could be if the market reacted positively.
However,Ripple CTO David Schwartzhad in the past suggested that a burn might not impact XRP price at all, citing a similar effect from Stellar’s supply burn in 2019.
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