The XRP Ledger (XRPL) is experiencing a surge in velocity, indicating increased network activity and potential price growth. CryptoQuant community analyst Maartunn has noted that the velocity of XRPL has been on the rise in recent weeks, suggesting a growing utility within the network. Velocity, calculated by dividing a crypto market cap by its transaction volume, reflects the frequency of network usage. This uptick in velocity could be an early sign of a forthcoming price surge for XRP.
The current velocity of XRPL is approaching a resistance level in a descending trendline, indicating a rise in network usage and the possibility of a price increase. This growth in velocity follows XRP’s significant price jump since the outcome of the US elections, with the token climbing from $0.5319 on Nov. 6 to a peak of $2.82 on Dec. 3, marking a 430% increase in less than a month.
Despite the increase in velocity, the total deposits in the XRPL blockchain have been declining since Dec. 16, dropping from $71.5 million to $58 million. This represents a nearly 20% decrease in total deposits. XRPL’s total value locked is connected to the automated market maker (AMM) pools on the blockchain, with $5 million in tokenized treasury bills issued by Open Eden circulating on XRPL.
Ripple Labs, the company behind XRPL, recently introduced its stablecoin, Ripple USD (RLUSD), which will be issued using the XRP Ledger and Ethereum. The launch of RLUSD aims to provide a regulated token pegged to the US dollar, potentially stimulating the growth of XRPL. This growth could be driven by traditional companies tokenizing real-world assets (RWA) on XRPL, creating a liquidity stream through RLUSD.
Bitwise estimates that the RWA market could expand to $3 trillion in the near future, with Ripple’s partnership with Archax to launch a money market fund managed by abrdn already addressing a portion of this market. These developments have the potential to further enhance XRPL usage and its velocity, setting the stage for continued growth within the network.