The XRP Ledger (XRPL) has seen a significant increase in velocity over the past few weeks, indicating growing utility within the network. According to data shared by CryptoQuant community analyst Maartunn, the rising velocity suggests frequent network usage and could be an early indication of an impending price surge for XRP.
What is Velocity and Why Does it Matter?
Velocity is calculated by dividing a crypto market cap by its transaction volume. An increasing velocity represents frequent network usage, which can be a positive indicator for the token’s price. In the case of XRPL, the velocity is approaching a resistance in a descending trendline, suggesting a growth in usage and potential price increase.
Recent Price Leap and Velocity Growth
XRPL’s velocity growth follows XRP’s remarkable price leap since the outcome of the US elections. The token saw a 430% increase in less than a month, from $0.5319 on Nov. 6 to peak at $2.82 on Dec. 3. Despite this increase, the total deposited in the blockchain has been falling since Dec. 16, shrinking from $71.5 million to $58 million as of press time.
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, providing a regulated token pegged to the US dollar. This could foster the growth of XRPL, driven by traditional companies tokenizing real-world assets (RWA) on XRPL. The company has also partnered with Archax to launch a money market fund managed by abrdn, which could further boost XRPL usage and velocity.
Market Potential
Bitwise estimates that the RWA market could grow to $3 trillion in the foreseeable future. With Ripple’s developments aimed at addressing this market, the potential for XRPL growth and increased velocity is significant.
Source: Cryptoslate.com
