Ripple, a blockchain-based payment protocol and cryptocurrency originator, has released its Q1 2024 XRP Market Report, providing insight into the state of the cryptocurrency market, related XRP ledger and XRP-related announcements, as well as market developments in previous quarters. This report demonstrates Ripple’s commitment to transparency and regular updates, demonstrating its belief in proactive communication and building trust across the industry.
Cryptocurrency Market Summary
According to Ripple, the first quarter of 2024 saw a number of noteworthy market developments, including continued demand for BTC spot ETFs in the U.S., growth in centralized and decentralized exchange volume, major regulatory and legal updates, and technological blockchain upgrades. Traditional institutional investors have identified large asset managers as a gateway to the cryptocurrency market, as evidenced by their consistent trading volume and inflows.
Cryptocurrency traders have previously used leverage to gain exposure, but the market is experiencing a period of mini-renaissance. Key examples include ETF-approved participants hedging CME’s inventory, projects like Ethena amassing $2 billion in delta-neutral assets, and funding rates entering unprecedented territory. As a result, these participants require more trading infrastructure. As prime brokers, payment networks, and third-party solutions become more common in the market, the velocity of trusted assets will increase, supporting the continued maturation and growth of the market.
Global regulatory developments
Stablecoin regulation has been a hot topic as EU regulators have published draft regulatory standards under the European Crypto Assets Regulation (MiCA) for stablecoin issuers. Hong Kong also introduced a regulatory sandbox for stablecoin issuers this year, and BIS issued regulatory recommendations for global stablecoin contracts. In the United States, Senators Gillibrand and Lummis have introduced a new stablecoin bill that aims to establish a regulatory framework for payment stablecoins.
Dubai’s virtual assets regulator has granted Deribit a conditional virtual asset provider (VASP) license, the Monetary Authority of Singapore (MAS) has granted in-principle approval for a payments license to OKX, and South Africa’s financial regulator has granted approval for over 300 cryptos. Announced monetary assets. The supplier has sought licensing approval in the relevant country. The SEC also reportedly sent Wells notices to Uniswap and Robinhood, while the DOJ charged KuCoin and its founders with violating anti-money laundering laws.
Deep Dive: XRP Market
XRP spot volume (average daily trading volume) soared to $865 million in the first quarter of ’24, a 40% increase over the fourth quarter of ’23. Average daily XRP derivatives open interest was $460 million in Q4 2023 compared to $500 million in Q1 2024. Spot volume and open interest continue to be highly correlated with general market activity, indicating robust activity across XRP trading and venues.
The industry has also seen several technological upgrades that have lowered the barriers to entry into cryptocurrency for individuals and institutions. This upgrade, coupled with Tier-1 asset managers entering the space to offer ETFs as well as other securitized products, marks a new chapter on the path to mainstream adoption.
On the XRP Ledger, XLS-30 has added non-custodial automated market makers (AMMs) as a native feature to XRPL’s decentralized exchange (DEX). This new feature is designed to provide DeFi developers and users with on-chain liquidity and trading capabilities.
Ripple’s XRP Holdings
Ripple reported XRP holdings at the beginning and end of the quarter. Your holdings are divided into two categories: XRP, which is currently available in your wallet, and XRP, which is subject to a ledger escrow lock that is released to Ripple every month. The majority of released XRP is put back into escrow each month.
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