Yet the market price hasn’t shown much lift, holding near the $3 mark and even slipping lower in recent sessions. For many traders, the sticking point is not demand but supply mechanics.

The Inflation Critique

Skeptics argue that XRP’s design creates a built-in drag on performance. Unlike Bitcoin, whose issuance rate steadily declines, XRP continues to see new tokens released each month from Ripple’s escrow holdings. With nearly 60% of its total 100 billion supply already circulating and around 36 billion still locked, the flow of new coins is expected to continue for years.

This gradual release is often described as inflationary, diluting the impact of new demand and keeping the price capped despite positive catalysts such as ETF approvals or derivatives listings.

The Defense: Predictability Matters

Supporters push back on this framing. Lawyer and Ripple advocate Bill Morgan points out that XRP remains a finite asset, with a hard ceiling that won’t be breached. He suggests that once escrowed tokens are fully distributed, Ripple could adopt burn mechanisms to reduce supply over time, shifting the asset from inflationary to potentially deflationary.

More importantly, Morgan stresses predictability. Because the release schedule is transparent and pre-set, markets can account for it – unlike projects where token emissions are erratic or unlimited. In his view, XRP’s system avoids the chaos of uncontrolled inflation.

Market Sentiment and Value Perception

The larger issue may be psychological. Crypto markets prize scarcity, and assets with built-in halving or burn structures often attract speculative fervor. XRP’s steady expansion in supply doesn’t fit that narrative, which can shape sentiment even if fundamentals remain strong.

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Yet price history shows that growing supply hasn’t prevented appreciation altogether. XRP has managed rallies in past cycles, suggesting adoption and utility can offset supply concerns. With Ripple pushing deeper into payments infrastructure and regulated markets, utility may eventually dominate perception.

Looking Ahead

The debate over XRP’s tokenomics isn’t going away. For critics, the escrow releases remain a cloud over every rally. For backers, the finite cap and potential for future burns make XRP no more inflationary than assets already embraced by the market.

As institutional products tied to XRP roll out, the question is whether investors will focus on supply drag – or on the possibility that predictable issuance is simply another feature in a market crowded with far more chaotic token models.

The information provided in this article is for educational purposes only and does not constitute financial, investment, or trading advice. Coindoo.com does not endorse or recommend any specific investment strategy or cryptocurrency. Always conduct your own research and consult with a licensed financial advisor before making any investment decisions.

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