XRP Ledger shows signs of increasing usage, suggesting XRP price increase
CryptoQuant community analyst Maartunn shared data indicating that the XRP Ledger’s (XRPL) velocity has risen in the past few weeks amid heightened activity, suggesting growing utility within the network.
Velocity is calculated by dividing a crypto market cap by its transaction volume. The analyst pointed out that an increasing velocity represents frequent network usage. He added that this could be an early indication of an impending price surge for XRP.
XRPL’s velocity is approaching a resistance in a descending trendline, suggesting a growth in usage and potential price increase.
Notably, XRPL velocity growth follows XRP’s price leap since the outcome of the US elections. The token saw a remarkable climb from $0.5319 on Nov. 6 to peak at $2.82 on Dec. 3 — a 430% increase in less than a month.
Despite the increase in velocity, the total deposited in the blockchain has been falling since Dec. 16, shrinking from $71.5 million to $58 million as of press time, according to data from DefiLlama. This movement represents a nearly 20% slump.
XRPL’s total value locked is tied to the automated market maker (AMM) pools from the blockchain.
In addition to the value locked, $5 million in tokenized treasury bills issued by Open Eden are circulating on XRPL.
Developments to boost growth
Ripple Labs, the company behind the XRPL, recently launched its stablecoin Ripple USD (RLUSD). The stablecoin will be issued using the XRP Ledger and Ethereum.
Although the stablecoin launched less than two weeks ago, Ripple’s goal is to provide a regulated token pegged to the US dollar, which could foster the growth of XRPL.
The growth could be driven by traditional companies tokenizing real-world assets (RWA) on XRPL since a liquidity stream would be created via RLUSD. The company even mentioned this in their stablecoin announcement.
Bitwise estimates that the RWA market could grow to $3 trillion in the foreseeable future.
The push to address a part of this market already started with Ripple’s partnership with Archax to launch a money market fund managed by abrdn. These developments could potentially further boost XRPL usage and, consequently, its velocity.
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