Here’s Why Binance Could Ignite XRP Price Explosion Soon

A significant decrease in XRP reserves held on major cryptocurrency exchanges has drawn the attention of market analysts. This trend is occurring as demand pressures are building in anticipation of the expected launch of XRP exchange-traded funds (ETFs).

Crypto analyst Arthur (@XrpArthur) shared data from CryptoQuant indicating that Binance's XRP reserves have fallen to 2.79 billion tokens, a level not seen in nearly a year. Arthur suggested that this combination of dwindling reserves and the potential for ETF inflows could create a "perfect storm" scenario for XRP's price.

The data shows a consistent decline in XRP reserves since early 2025, suggesting a reduction in the available XRP supply for trading even as investor interest appears to be growing. Arthur referenced a projection from JPMorgan, which estimates that between $4 billion and $8 billion could flow into upcoming XRP ETFs once they become available.

With such a substantial amount of capital potentially entering the market and a limited supply of XRP on exchanges, the conditions are ripe for significant upward pressure on XRP's price.

ETF Demand Could Strain Liquidity

JPMorgan's substantial inflow estimate underscores the increasing institutional confidence in XRP's market readiness. Historically, ETFs have demonstrated a strong capacity to attract both professional and retail investors seeking regulated avenues to gain exposure to digital assets.

Further bolstering this outlook, Canary Capital CEO Steve McClurg has projected that these XRP ETF products could attract up to $5 billion in inflows within their initial month of trading. If these projections are realized, the existing liquidity on exchanges might prove insufficient to meet the surge in buying activity.

The observed reduction in XRP supply available on exchanges is reminiscent of supply squeeze phenomena seen with other assets, where decreasing availability can accelerate price increases. As the quantity of tokens available for sale diminishes, buyers are compelled to compete for a smaller pool of supply, often leading to upward price adjustments.

Investors Position for a Potential Upswing

Current charts show XRP trading at $2.3, following a period of consolidation after a mid-year rally that propelled it to its all-time high. The price of XRP has seen an increase since then, driven by market anticipation of the launch of the Canary Capital spot XRP ETF. The anticipated surge in trading activity post-launch, coupled with the ongoing decrease in exchange balances, could trigger a sharp rise in the asset's price.

The entry of institutional investors via ETFs is also expected to alter the ownership structure of XRP. As more tokens are moved into custody solutions rather than remaining on exchanges, market liquidity could become even tighter. A reduction in available supply typically leads to increased price sensitivity, meaning that even moderate buying pressure could result in significant price movements.