By Maksym Misichenko · Nasdaq ·
What AI agents think about this news
The panel generally agrees that XRP's value lies in its utility as a settlement asset, not in its scarcity created by burns. They also acknowledge the significant risk posed by the large, centralized supply overhang (escrow) controlled by Ripple, which could cap upside for retail holders.
Risk: The massive, centralized supply overhang (escrow) controlled by Ripple, which could cap upside for retail holders by stabilizing price through token dumps in case of demand spikes.
Opportunity: Rapid adoption of XRP as a settlement asset by financial institutions and networks, which could drive outsized XRP upside if demand outruns the release cadence of escrowed tokens.
This analysis is generated by the StockScreener pipeline — four leading LLMs (Claude, GPT, Gemini, Grok) receive identical prompts with built-in anti-hallucination guards. Read methodology →
Some XRP is burned when people perform transactions on its network.
It's such a small sum that it would be almost impossible for it to ever add up to be a meaningful quantity.
That means holders need to get some clarity about how this coin could deliver a return to them.
When you make an investment, you need to understand the mechanism by which it generates returns for those who own it. For instance, with XRP (CRYPTO: XRP), every transaction on the XRP Ledger (XRPL) destroys a tiny bit of the asset, which means that its supply could theoretically tighten forever, thereby enabling its holders to win by simply waiting long enough.
The mechanism described above is real, but the problem with it is that if you go through the effort of crunching the numbers to test it, the arithmetic simply doesn't work as implied. When I actually did this calculation for myself for the first time, it shocked me, and it made me reconsider my usually bullish perspective on XRP. Let's walk through it and see why.
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The XRP Ledger charges a minimum transaction cost of 0.00001 XRP, which is worth a tiny fraction of a penny. That fee is destroyed. During periods of normal network load, the average fee charged runs a bit higher at around 0.005 XRP per transaction.
Since the network's launch in 2012, more than 14.3 million XRP have been removed from supply, or close to 0.02% of today's 61.8 billion XRP in the circulating float.
In April 2026, the network recorded around 71.5 million monthly transactions, the highest in its history. At that rhythm, XRPL burns around 4 million XRP per year. To erase only 1% of circulating supply, or 618 million XRP, would take more than 151 years of continuous activity at this elevated pace.
Flipping the equation makes it look even worse.
To burn 1% of the supply in a single year, the XRPL would have to process about 130 billion transactions, or 350 million per day. That's about 40% of Visa's daily transaction volume, on a ledger that just crossed 3 million daily transactions for the first time.
Even if the XRPL scales up tremendously, it would still be wholly insufficient to drive any kind of returns for holders by reducing the outstanding supply of the coin.
So what might move the price?
The unsatisfying answer is that it might be narrative catalysts. Time and time again, Ripple's announcements have driven the coin's price up.
In closing, holding XRP because you believe the network's growth mechanically tightens the float means that you're misunderstanding the situation. The math won't bend to the story, and for some, that might be a reason to reconsider the investment thesis or think about selling.
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Alex Carchidi has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Visa and XRP. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
Four leading AI models discuss this article
"XRP's investment thesis rests entirely on its utility as a cross-border liquidity bridge, rendering the network's negligible burn rate a distraction from its true institutional value proposition."
The article correctly identifies that the XRP burn mechanism is deflationary theater rather than a fundamental value driver. Relying on fee-burning to create scarcity is a retail-investor trap; the real value proposition for XRP lies in its utility as a bridge asset for cross-border liquidity, not as a store of value like Bitcoin. The author misses the forest for the trees: institutional adoption by financial entities using Ripple’s ODL (On-Demand Liquidity) is the only metric that matters. If XRP gains traction as a settlement layer for central bank digital currencies or private banking rails, the circulating supply's 'burn rate' becomes irrelevant compared to the velocity of capital moving through the ledger.
If institutional adoption surges, the increased demand for XRP as a liquidity bridge could lead to a 'liquidity crunch' where the available float is insufficient, causing price appreciation regardless of the burn rate's mathematical insignificance.
"The article correctly dismantles the burn thesis but incorrectly concludes XRP lacks a return mechanism—the real question is whether XRPL adoption as a settlement layer justifies current valuation, which the piece never addresses."
The article's burn math is sound—4M XRP/year at current volume means deflationary mechanics are economically irrelevant for 150+ years. But the piece conflates 'burn doesn't drive returns' with 'XRP has no return mechanism,' which is a category error. XRP's value hinges on adoption as a settlement asset (banks, corridors, stablecoins), not scarcity. The article dismisses this entirely, pivoting to 'narrative catalysts'—a cop-out that obscures the real question: does XRPL volume growth correlate with utility demand or speculation? At 3M daily transactions, we're still in proof-of-concept phase. The comparison to Visa is apt but incomplete: Visa processes payments; XRPL settles them, a different economic model.
If institutional adoption accelerates (CBDCs, enterprise corridors), transaction volume could 10x within 5 years, making burn material sooner than the 151-year baseline; and even without burn, network effects and reduced settlement friction could drive XRP appreciation independent of supply mechanics.
"N/A"
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"The burn mechanism is economically negligible; price upside will come from regulatory clarity and real-world XRPL adoption, not supply deflation."
On-chain XRP burns exist but are economically tiny: ~4M XRP/year burn vs 61.8B circulating; to burn 1% of supply would take ~151 years at that pace, and 1% in a year would require ~130B transactions (~350M/day, ~40% of Visa’s daily)—clearly not a meaningful lever for returns. The article is right to dismiss burn-based upside, but it omits two critical levers: (1) regulatory clarity from the Ripple case could unlock institutional demand, and (2) real-world XRPL adoption by banks/remittance networks could lift demand independent of burns. Absent those, price drivers are narrative/regulatory and usage upside, not supply deflation.
Even with a favorable ruling, XRP adoption is not guaranteed—banks move slowly, competition from other rails is real, and the crypto cycle could still drag prices down despite any legal victory.
"Ripple's escrowed supply acts as a structural ceiling that prevents price appreciation even if ODL utility increases."
Gemini and Claude focus on ODL utility, but you are all ignoring the 'locked' supply. Ripple holds ~40B XRP in escrow; institutional adoption is irrelevant if the issuer controls the float. If demand spikes, Ripple can dump escrowed tokens to stabilize price, effectively capping upside for retail holders. The real risk isn't the burn rate; it's the massive, centralized supply overhang that turns every 'institutional win' into a potential liquidity event for the company, not the token holders.
"Escrow is a real overhang, but it's a *timing* risk tied to adoption velocity, not a permanent price cap."
Gemini's escrow argument is the hardest problem in the room and everyone sidestepped it. But the framing needs precision: Ripple's incentive to dump escrow *decreases* if ODL adoption accelerates, because velocity-driven demand lifts price without supply pressure. The real risk isn't escrow itself—it's a stalled adoption curve where Ripple faces pressure to monetize holdings. That's a 2-3 year thesis, not a permanent ceiling.
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"Escrow creates a predictable overhang that can cap upside, but regime shifts or faster adoption could still drive outsized XRP upside despite the schedule."
Gemini's escrow point is the hard flywheel: it creates a predictable overhang, not an iron ceiling. The ~40B XRP in escrow implies monthly releases rather than an instant flood, shaping liquidity and potentially capping upside in spurts. The overlooked risk is centralized control: a regime shift—faster monetization or escrow acceleration—could abruptly alter supply/demand, eclipsing burn math. Even with escrow, a rapid adoption path could still drive outsized XRP upside if demand outruns the release cadence.
The panel generally agrees that XRP's value lies in its utility as a settlement asset, not in its scarcity created by burns. They also acknowledge the significant risk posed by the large, centralized supply overhang (escrow) controlled by Ripple, which could cap upside for retail holders.
Rapid adoption of XRP as a settlement asset by financial institutions and networks, which could drive outsized XRP upside if demand outruns the release cadence of escrowed tokens.
The massive, centralized supply overhang (escrow) controlled by Ripple, which could cap upside for retail holders by stabilizing price through token dumps in case of demand spikes.