Coinbase XRP Cold Wallets Plunge 90%: Could a Supply Crunch Push Prices Higher?

Andrew Chen
Coinbase

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  • Coinbase’s cold wallets fell from 970M to 98M XRP, an 89.8% drop.
  • Most XRP moved to hot wallets to meet withdrawal demands.
  • Market speculation hints at potential supply-driven price surges.

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XRP investors are keeping a close eye on Coinbase as the exchange’s cold wallet holdings drop sharply, signaling possible supply changes in the market.

Over the past three months, Coinbase, the United States’ largest crypto exchange, has witnessed a dramatic reduction in XRP stored in cold wallets. From 970 million XRP in June, the exchange now holds just 98 million—a staggering 89.8% decrease. The sudden movement has grabbed the attention of traders and community watchers, raising questions about market liquidity and potential price impacts.

What Cold Wallet Movements Reveal

Cold wallets are designed for long-term storage, often holding reserves and customer deposits that exchanges don’t use daily. In contrast, hot wallets facilitate active trading and withdrawals. Despite this, Coinbase’s cold wallets have been unusually active, transferring millions of XRP into hot wallets over the past three months.

Community tracker “XRP Liquidity” reported that 52 cold wallets held nearly 970 million XRP in early June. Most of these wallets contained 16–26 million XRP each. However, ongoing transfers have left only six cold wallets today, each holding 16M+ XRP.

Ripple of Transactions Across Platforms

On-chain monitoring by Whale Alert confirmed that these XRP transfers primarily moved funds to Coinbase’s hot wallets before being distributed to other exchanges such as Binance and Stake, as well as some unknown addresses. For instance, on September 13, 16.5 million XRP moved from a cold wallet to a hot wallet, which then dispersed nearly all tokens to meet withdrawal demands.

These movements suggest that Coinbase is actively managing liquidity rather than offloading XRP permanently. However, the scale of these transfers has fueled speculation within the XRP community about a potential supply crunch, which some hope could push prices toward $10.

Market Implications

While Coinbase has not provided any official explanation, traders are closely monitoring on-chain data. Large-scale movements from cold wallets are unusual and often interpreted as early signals of market shifts. For XRP holders, the declining exchange reserves may influence supply-demand dynamics, especially if withdrawal activity continues.

Coinbase’s dramatic reduction in XRP cold wallet holdings has raised eyebrows and market speculation. While much of the movement appears to support withdrawal liquidity, the sharp decline could hint at larger market trends, keeping traders and investors vigilant.

Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.

Also Read: Coinbase Sues SEC Over Deleted Gensler Texts: Full Crypto Transparency at Stake

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