Coinbase XRP holdings plummet 40% as exchange quietly slashes reserves

Coinbase XRP holdings have suddenly shrunk by 40%, triggering intense speculation across the crypto community.

As XRP’s on-chain activity picks up pace, onlookers are watching closely as the major U.S.-based exchange quietly repositions its reserves.

Whether it’s strategic or a deeper play tied to Ripple’s ecosystem, one thing is certain: this move marks a major shift in how Coinbase is managing XRP.

The Coinbase XRP holdings saga took a sharp turn this week as blockchain data revealed that the exchange now controls only 35 XRP-funded cold wallets, down from 52 just weeks ago.

This marks a significant 40% reduction in its overall XRP holdings — a move that hasn’t gone unnoticed by on-chain analysts and investors alike.

40% decline sparks onchain frenzy

Just a month ago, Coinbase held an estimated 970 million XRP, stored across 52 cold wallets, according to data from XRPWallets.

At the time, 10 of those wallets contained 26.8 million XRP each, while another 42 wallets stored 16.8 million XRP each.

Fast-forward to July 29, and the situation has changed drastically. Real-time tracking shows that many of these wallets have either been drained or now hold only a few tokens.

Notably, a large transaction involving 16.8 million XRP was transferred from “Cold Wallet 400” to a Coinbase hot wallet — a detail that’s sparked a flurry of speculation.

So what’s going on with Coinbase XRP holdings? One prevailing theory is that the exchange is consolidating its assets into new subwallets, possibly linked to Ripple’s On-Demand Liquidity (ODL) corridors.

These corridors often route through crypto custodians like BitGo and exchanges like Bitstamp, both of which have long-standing ties to Ripple.

“It’s unlikely this move reflects panic or liquidation,” said crypto analyst Nic Carter, partner at Castle Island Ventures.

“More likely, it’s Coinbase aligning their infrastructure ahead of XRP-related network expansion or increased trading demand.”

Strategic realignments or market anticipation?

Another possibility is that Coinbase is bracing for increased XRP utility. With XRP’s use in cross-border payments on the rise and legal clarity improving after Ripple’s partial win against the SEC in 2023, exchanges could be preparing for a new wave of adoption.

“This looks like preemptive positioning,” said Caroline Bowler, CEO of BTC Markets. “If Ripple’s ecosystem sees higher liquidity demands, especially via ODL, exchanges like Coinbase may be optimizing how and where they store XRP.”

Indeed, smaller XRP transactions have already been spotted entering Ripple-linked liquidity hubs, which supports the theory that this is more operational realignment than a sell-off.

Cold storage to hot wallets — A calculated shift

Despite the sharp drop in Coinbase XRP holdings, there’s no clear evidence suggesting mass liquidation.

The strategic nature of the transfers — moving from cold storage to hot wallets and institutional-grade custodians — indicates that this could be part of a broader infrastructure recalibration.

According to blockchain intelligence firm Whale Alert, Coinbase has rerouted XRP assets to multiple hot wallets in traceable increments, often followed by smaller outbound transfers to RippleNet-associated platforms.

“Cold wallet rotation is a common practice, especially in times of potential volatility or regulatory transition,” noted James Check, lead analyst at Glassnode. “The important thing is that the XRP hasn’t left the Coinbase ecosystem entirely — it’s just moving lanes.”

Shrinking role in XRP holdings raises eyebrows

Still, the fact remains: Coinbase XRP holdings are no longer what they once were. Once a significant XRP custodian, Coinbase’s diminishing footprint comes at a time when XRP is witnessing renewed interest — particularly after Ripple’s expanding global partnerships.

The contrast is striking: as XRP gains momentum globally, Coinbase appears to be stepping back from playing the role of a top-tier XRP vault.

The sudden 40% plunge in Coinbase XRP holdings isn’t a sell-off — it’s a realignment. As XRP gears up for broader utility and adoption through Ripple’s infrastructure, exchanges like Coinbase are moving their pieces into position.

Whether this signals a bullish outlook or a more conservative approach to custody remains to be seen.

What’s undeniable, though, is that Coinbase’s influence over XRP liquidity is shrinking, and that shift could have ripple effects (pun intended) on how the market perceives centralized holdings of decentralized assets.Coinbase XRP Holdings Restructure Triggers Industry Buzz