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XRP holders need to pay attention to a significant trend that could impact token prices—the potential implementation of a token burn mechanism. This could likely become a key turning point for the increase in XRP's value.
Currently, the total supply of XRP is fixed at 100 billion coins, and there will be no additional issuance. However, approximately 40 billion tokens are still held by Ripple through a custodial method. There has been ongoing speculation in the market that the excessive number of tokens makes it difficult for prices to rise. However, the current situation seems to be facing a transformation.
There are three main reasons why a token burn plan may be implemented:
First of all, Ripple does have the authority to burn the custodied tokens.
Secondly, the community has a strong voice for this and hopes to establish a healthier token economic model, similar to the fee burning mechanism previously implemented by Ethereum.
Third, the regulatory environment is becoming clearer, and the legal dispute with the SEC is expected to conclude in 2025. Once a victory is achieved or a settlement is reached, Ripple will have greater room to implement new policies.
Even without implementing a burn plan, XRP itself still possesses several advantages: if the regulatory lawsuit is won, exchanges and institutional investors may increase their support; it has already established partnerships with over 300 banks; and it plays a practical role in the cross-border payment sector.
However, if Ripple does decide to burn a large amount of tokens (such as 10 billion or 20 billion), the market sentiment brought about by scarcity could trigger significant price fluctuations. This effect may be similar to the market enthusiasm before past Bitcoin halvings.
Potential positive factors for XRP in the future include: regulatory clarity brought by the end of the SEC lawsuit, possible large-scale token burn, growth in application scenarios, and relisting on exchanges.
In the face of these potential changes, investors need to closely monitor market dynamics and be well prepared.