Messari flags 46% overcount in Ripple’s XRP market cap

Crypto research firm Messari, in its Unqualified Opinions newsletter, estimates Ripple’s XRP circulating supply and market capitalization may be overstated by 46%, or about $6.1 billion, and urges major index providers to reexamine the figures.

Messari wrote: “XRP’s liquid ‘circulating supply’ and ‘market cap’ could be overstated by 46%, which would put total XRP ‘market cap’ at $6.9 billion vs. $13.0 billion widely reported at the current USD-XRP exchange rate.” At the time of the analysis, XRP’s reported market value was $13,083,872,584 with a circulating supply of 41,040,405,095 XRP. A reduction of the size Messari outlines would remove XRP from the No. 2 position behind Ethereum based on reported market capitalization.

The firm has asked large index providers, including those that power institutional products, to review the findings. It added: “We do not believe reliance on Ripple’s XRP data API can be expected to yield accurate circulating supply figures in light of these findings,” and invited providers to “review this report and reach out to us with questions regarding our methodology.”

Messari attributes the potential overstatement to supply it views as illiquid or subject to resale restrictions. The report cites Ripple-held balances and agreements with market-making partners, a Ripple-affiliated foundation, and Ripple’s co-founders that it believes constrain sales. “In addition to the 59 billion XRP owned by Ripple and held on the company’s balance sheet (52.5 billion in long-term escrow, and 6.5 billion illiquid, but available for restricted sales), there could be significant, persistent sell-side pressure in the XRP market depending on the length and structure of selling restrictions… all of which appear to have negotiated rate limits for sales based on exchange trading volume of XRP.”

A more refined figure, the researchers wrote, will require input from the issuer: “A more precise estimate of XRP supply will likely require proactive disclosures from Ripple, given the contractual restrictions the company has placed on a large percentage of its XRP resales.” Messari noted it has contacted Ripple multiple times and has not received a response.

The analysis also questions the reliability of trading data that feeds supply and market cap rankings. According to the report, “more than 99% of XRP trading volume appears to come from overseas exchanges, many of which have been suspected of wash trading,” and it calls for greater transparency from Ripple on volume and liquidity conditions tied to programmatic sales and market-making arrangements.

Messari acknowledged that its numbers are estimates that “lack precision,” but argued the gap between reported and adjusted figures is large enough to warrant review. The 10-page report draws on public statements from Ripple executives and co-founders, forum posts, tax records, and other public documents to model circulating supply and liquidity constraints.

Ripple reports quarterly on sales and escrow releases and has placed most of its XRP holdings in time-locked escrow accounts. Messari’s analysis focuses on how resale restrictions, rate limits, and counterparties’ agreements may keep a share of XRP from freely circulating, which affects what should be counted in market cap metrics.

In urging data providers to reassess XRP’s circulating supply, Messari opened the door to engagement on its methodology and underlying assumptions.