Billions in BTC, ETH, XRP Move to Exchanges After Trump’s Reserve Announcement
Following President Donald Trump’s announcement regarding the inclusion of crypto assets in the U.S. strategic reserve, billions in XRP tokens and thousands of Bitcoin (BTC) were moved to exchanges, a trend that may have contributed to the rapid price fluctuations observed in recent days. The influx of these cryptocurrencies into exchange wallets raised concerns about potential sell-offs as large token holdings are usually stored in cold wallets, which are considered more secure and less likely to be sold.
Surge in XRP and Bitcoin Inflows
According to on-chain analysis firm CryptoQuant, there was a significant spike in the inflows to exchanges shortly after Trump’s announcement. The hourly amount of XRP flowing into exchanges surged to as much as 193 million XRP, with the majority of these flows coming from whales, or large holders, making transactions of 1 million XRP or more. This surge in activity likely indicates that traders were preparing to sell or take profits after the price surge triggered by the announcement.
Similarly, Bitcoin (BTC) saw a major increase in inflows to exchanges, with daily amounts rising from around 500-1,000 BTC to 6,739 BTC just a day after Trump’s statement. Ethereum (ETH) also experienced a spike, with nearly 300,000 ETH moving to exchanges within a single hour.
“Inflows to exchanges typically signal a potential sell-off, as large holdings are often stored offline in cold wallets,” said a CryptoQuant analyst.
Impact on Market Demand and Price Volatility
The influx of these cryptocurrencies into exchanges corresponds with a rapid reversal in crypto prices. After the announcement, assets like Bitcoin, Ethereum, and XRP surged, only to experience steep declines shortly after. According to CryptoQuant analysts, the rise and fall of these digital assets indicate that real spot demand for these cryptocurrencies is in contraction, making it difficult to sustain upward momentum.
“Bitcoin’s apparent demand growth has continued to decline after a period of acceleration in late 2024, spurred by the U.S. election results, and is now in contraction territory for the first time since September 2024,” the analysts added. “Unless demand starts to increase again, sustaining a rally in crypto prices will remain challenging.”
The Declining Demand for Bitcoin
Apparent demand is a key on-chain metric used to measure the balance between Bitcoin’s production (new coins mined) and changes in its inventory, specifically coins that have been inactive for over a year. The recent analysis shows that retail accumulation of Bitcoin has been down since early November 2024, signaling a decrease in demand among individual investors. This declining demand is a significant factor that could hinder the sustainability of any crypto market rally.
While the U.S. election results initially spurred an uptick in demand for Bitcoin, the market now faces a contraction phase, making it increasingly difficult for Bitcoin and other cryptocurrencies to maintain momentum without a rebound in demand.
Final Thoughts: The Challenges Ahead for Crypto Prices
The crypto market is facing a period of increased volatility following Trump’s announcement and the massive inflows to exchanges. As these assets continue to be moved to exchanges, the market remains under pressure from declining demand and liquidations. While the strategic reserve plans sparked initial optimism, the challenge for Bitcoin, Ethereum, and XRP lies in sustaining long-term price growth amid contracting demand. Investors and traders alike will be watching closely to see if demand rebounds and if the market can stabilize in the coming weeks.
