Cryptophanes (Crs) are roughly spherical organic nanocages used as vehicles for hosting xenon atoms in 129Xe NMR biosensor (XBS) structures. Crs also bind other guests, importantly water, which is abundant in biological systems. In other host cages, it has been found that the release of "high-energy" water from confinement constitutes an important contribution to the binding affinity of nonwater guests. Despite that, the role of water has received little attention in the XBS field. Based on molecular dynamics simulations in explicit water solvent, we here study the properties of confined water in three different CrA cages that have an identical interior but are functionalized with 0, 3, or 6 water solubility-enhancing, hydrophilic CH2COOH moieties. The number of the solubility groups is found to be a decisive factor for the structures and dynamics of the confined water. Formation of stable water-molecule chains is predicted within the cage with six hydrophilic groups, starting with the anchoring of one water molecule at the portal between the cage and the bulk solution. We find that the experimentally measured differences in the Xe-binding affinities of the cages can be related to the average number of hydrogen bonds per confined water molecule. The rotational dynamics of the confined water is significantly slower than that in the bulk, suggesting NMR relaxation measurements to study the intracavity water. The present findings reveal new details about the microscopic cryptophane-H2O host-guest chemistry, which will become important in the design of improved XBS devices.