The recent announcement by U.S. President Donald Trump concerning the inclusion of cryptocurrencies like Bitcoin (BTC), Ethereum (ETH), and XRP as part of a proposed U.S. strategic crypto reserve has triggered a significant movement of these assets to exchanges. This influx may have played a role in the swift price fluctuations observed in the market.
Increased XRP Inflows: Whale Activity Drives Transactions
In the wake of Trump’s revelation, XRP saw a notable surge in inflows, reaching as high as 193 million tokens within a single hour. According to on-chain analysis from CryptoQuant, a significant portion of these transactions were executed by “whales,” or major holders of cryptocurrency, who moved one million XRP or more at a time. This heavy activity indicates a strategic response to the news from influential market players.
Bitcoin and Ethereum Follow Suit: Exchange Inflows Spike
The response wasn’t limited to XRP. Bitcoin also experienced a dramatic uptick in exchange inflows, soaring from a range of 500-1,000 BTC per hour to a peak of 6,739 BTC just one day after the announcement. Meanwhile, Ethereum saw its inflows rise sharply, with nearly 300,000 ETH moving to exchanges within a single hour. Such movements typically signal an intent to sell, as large holders prefer to keep their assets in cold storage (offline wallets) for security.
Market Dynamics: Demand Contraction Post-Announcement
Despite the initial surge following the announcement, analysts at CryptoQuant highlighted the concerning trend of declining demand for cryptocurrencies. The fluctuations in prices observed on Monday and Tuesday indicated that actual market demand is in contraction, with a notable decrease in apparent demand for Bitcoin.
According to the analysts, “Bitcoin apparent demand growth has continued to decline after a period of acceleration in November–December 2024 spurred by the U.S. election results and is now in contraction territory for the first time since September 2024.” They emphasized that without a resurgence in Bitcoin demand, maintaining any rally in cryptocurrency prices could prove to be a significant challenge.
Understanding Apparent Demand: A Key Metric in Crypto
Apparent demand is a crucial on-chain metric that assesses the balance between Bitcoin’s production—represented by newly mined coins—and changes in its inventory, which includes coins that have remained inactive for more than a year. Notably, retail accumulation has been on a decline since early November, reflecting the broader trends in the cryptocurrency market as reported by CoinDesk.
In summary, the recent developments surrounding Trump’s strategic reserve plans have led to a flurry of cryptocurrency movements to exchanges. While this activity may suggest immediate market reactions, the underlying demand dynamics reveal a more complex narrative for the future of crypto prices.
