Coinbase has experienced a dramatic 89.8% reduction in its XRP cold wallet holdings over the past three months, dropping from 970 million XRP across 52 cold wallets in early June to just 98 million XRP across only six cold wallets by mid-September. The exchange has been systematically moving XRP from cold storage to hot wallets to meet customer withdrawal demands, with a notable transaction on September 13 involving the transfer of 16.5 million XRP from cold wallet 'Cold 141' to hot wallet 'Coinbase 6'.
The scale of these movements has raised concerns within the cryptocurrency community, as cold wallets typically maintain minimal activity for long-term asset storage. Market tracking platform Whale Alert flagged these large transfers as significant, with transactions often exceeding 16 million XRP tokens. According to data from XRPScan, the remaining cold wallets now hold approximately 16 million XRP each.
Industry experts speculate that these movements may be connected to institutional custody arrangements with BlackRock, with Coinbase reducing its XRP holdings from over 780 million to around 132 million tokens. This shift has resulted in a 66% drop in XRP liquidity on the exchange, potentially increasing market volatility. Crypto investor Stern Drew noted that timing of these reductions often coincided with low-liquidity hours, which could amplify downside price swings.
Coinbase has not provided any official comment regarding these significant changes to its XRP holdings or the speculation about institutional custody arrangements. The community remains divided on whether these movements indicate routine operational adjustments or signal broader market strategies.