XRP's exchange supply has hit a seven-year low at 1.6 billion coins after dropping by half in just nine months. This reduction was expected to send the price higher due to reduced sell pressure, but so far it hasn't moved.
The disappearing supply is largely due to XRP being pulled out of exchanges and locked away into custody for spot ETFs or stored in private wallets held by long-term investors. While this should theoretically drive up demand and prices, buyers have stayed away due to the current market conditions.
The main reason for the lack of buying interest is the ongoing inflation concerns and high interest rates, which have led to money flowing out of risky assets like crypto into safer options. This has kept even large holders from committing to buying XRP, with some whales showing mixed signals by either increasing their holdings or selling their shares.
The passage of the Digital Asset CLARITY Act is seen as a potential catalyst for the market. If it becomes law, up to $8 billion could flow into XRP ETFs, but its chances are uncertain and passage may be far from certain with only about seven votes needed in the Senate.