1 Quick Calculation That Will Make You Think Twice About Buying or Holding XRP

When you make an investment, you need to understand the mechanism by which it generates returns for those who own it. For instance, with XRP (CRYPTO: XRP), every transaction on the XRP Ledger (XRPL) destroys a tiny bit of the asset, which means that its supply could theoretically tighten forever, thereby enabling its holders to win by simply waiting long enough.

The mechanism described above is real, but the problem with it is that if you go through the effort of crunching the numbers to test it, the arithmetic simply doesn't work as implied. When I actually did this calculation for myself for the first time, it shocked me, and it made me reconsider my usually bullish perspective on XRP. Let's walk through it and see why.

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The burn math

The XRP Ledger charges a minimum transaction cost of 0.00001 XRP, which is worth a tiny fraction of a penny. That fee is destroyed. During periods of normal network load, the average fee charged runs a bit higher at around 0.005 XRP per transaction.

Since the network's launch in 2012, more than 14.3 million XRP have been removed from supply, or close to 0.02% of today's 61.8 billion XRP in the circulating float.

In April 2026, the network recorded around 71.5 million monthly transactions, the highest in its history. At that rhythm, XRPL burns around 4 million XRP per year. To erase only 1% of circulating supply, or 618 million XRP, would take more than 151 years of continuous activity at this elevated pace.

Flipping the equation makes it look even worse.

To burn 1% of the supply in a single year, the XRPL would have to process about 130 billion transactions, or 350 million per day. That's about 40% of Visa's daily transaction volume, on a ledger that just crossed 3 million daily transactions for the first time.

Even if the XRPL scales up tremendously, it would still be wholly insufficient to drive any kind of returns for holders by reducing the outstanding supply of the coin.

If not burns, then what?

So what might move the price?

The unsatisfying answer is that it might be narrative catalysts. Time and time again, Ripple's announcements have driven the coin's price up.

In closing, holding XRP because you believe the network's growth mechanically tightens the float means that you're misunderstanding the situation. The math won't bend to the story, and for some, that might be a reason to reconsider the investment thesis or think about selling.

Alex Carchidi has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Visa and XRP. The Motley Fool has a disclosure policy.