Why XRP Supply Crashing On Coinbase Is A Good Thing For The Price

New reports reveal that XRP’s supply on Coinbase has crashed to historical lows as investors and community members appear to be boycotting the exchange following the recent delay in the CLARITY Act. On the one hand, the recent movement shows joint unity among XRP holders as they collectively exit exchanges in protest. On the other hand, analysts suggest that the surge in withdrawals could trigger a supply crunch for XRP, potentially impacting its price. 

XRP advocate Diana has taken to X to explain the recent collapse in Coinbase’s XRP reserves. She reported that, as of late March 2026, the exchange’s balance had fallen to about 101.86 million XRP following a wave of withdrawals by holders. Some estimates suggest that Coinbase’s supply has dropped by nearly 90% in just a few months, marking a record low. 

The recent boycott stems from widespread frustration over Coinbase’s pushback against the CLARITY Act. The company has expressed “significant concerns” with the latest Senate compromise, particularly the wording that would ban passive yield on stablecoins. 

Notably, in 2025, Coinbase and partner Circle generated roughly $2.75 billion in gross interest income from USDC reserves. Of this, Coinbase is estimated to have received about $1.35 billion, nearly 19% of its total revenue. Given the scale of these profits, many in the XRP community believe that Coinbase’s opposition to the revised bill is not to protect crypto users but to prevent restrictions on one of its major revenue streams.

In addition, leaked claims that the exchange had requested that Ripple pay millions of dollars to list XRP in 2019 have also fueled anger within the community. Consequently, Diana reported that recent 30-day snapshots show net outflows on Coinbase ranging from 21 million to 95 million XRP, indicating that holders are moving coins to self-custody or other exchanges. 

If this trend continues, Coinbase could soon become the exchange with one of the lowest XRP reserves in years. Recent actions by XRP holders also highlight the community’s unity and willingness to push back against perceived unfairness. Amid these developments, Diana has warned that the declining reserves could spark a potential supply crunch if market demand returns.  

A reduced XRP balance on a major exchange like Coinbase can create a possible supply shock. When fewer tokens are available for trading and buying interest rises, prices can also increase. 

Typically, a tight supply combined with active demand can induce scarcity, which is historically known to trigger an upward momentum. For XRP, the recent outflow trend could position it for potential gains if buying pressure returns. Although the decline in Coinbase may seem negative initially, it could benefit holders in the long run. 

Featured image from Unsplash, chart from TradingView