The CryptoQuant community analyst, Maartunn, shared data indicating that the velocity of the XRP Ledger (XRPL) has increased in recent weeks amid heightened activity, suggesting growing utility within the network.
Velocity is calculated by dividing the market capitalization of a cryptocurrency by its transaction volume. The analyst noted that increasing velocity represents frequent use of the network. He added that this could be an early indication of an imminent price increase for $XRP .
The velocity of XRPL is approaching resistance on a downward trend line, suggesting growth in usage and a possible price increase.
In particular, the growth in the velocity of XRPL follows the price jump of XRP since the outcome of the US elections. The token experienced a notable rise from USD 0.5319 on November 6 to a high of USD 2.82 on December 3, a 430% increase in less than a month.
Despite the increase in velocity, the total deposited on the blockchain has been declining since December 16, dropping from USD 71.5 million to USD 58 million at the close of this edition, according to data from DefiLlama. This movement represents a decrease of nearly 20%.
The total locked value of XRPL is linked to the automated market maker (AMM) pools of the blockchain.
In addition to the locked value, 5 million dollars in tokenized treasury bills issued by Open Eden are circulating on XRPL.
Developments to drive growth
Ripple Labs, the company behind the XRPL, recently launched its stablecoin Ripple USD (RLUSD). The stablecoin will be issued using XRP Ledger and Ethereum.
Although the stablecoin was launched less than two weeks ago, Ripple's goal is to provide a regulated token linked to the US dollar, which could foster the growth of XRPL.
Growth could be driven by traditional companies tokenizing real-world assets (RWA) on XRPL, as a liquidity flow would be created through RLUSD. The company even mentioned this in its stablecoin announcement.
Bitwise estimates that the RWA market could grow to 3 trillion dollars in the near future.
The momentum to address a portion of this market has already begun with Ripple's partnership with Archax to launch a money market fund managed by Abrdn. These developments could further boost the use of XRPL and, consequently, its velocity.
