There are signs that fresh capital is flowing in, and getting used.
Putting an investment of $2,000 to work in crypto is a lot easier when you confine your options to assets that are touching real value already, like XRP (XRP 3.76%).
In fact, there are two fresh data points that support the idea that XRP is a place where capital flows to be managed, and they’re both solid reasons to be bullish. Neither guarantees a higher coin price immediately, but both strengthen the case that the XRP Ledger (XRPL) is getting used for what it was built to do.
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1. The stablecoin footprint is growing, and fast
A growing stablecoin base on a blockchain suggests that there’s more spendable money circulating in its ecosystem.
And on the XRP Ledger, there are currently around $425 million in stablecoins already, up by 6.6% over the 30-day period ending on Feb. 12. Traditionally, stablecoins tend to be the on-ramp for real (and valuable) economic behaviors that enable all sorts of applications of blockchain technology, like utilizing decentralized finance (DeFi) services to generate a yield or take out loans.
Today’s Change
(-3.76%) $-0.06
Current Price
$1.44
Key Data Points
Market Cap
$87B
Day’s Range
$1.43 – $1.50
52wk Range
$1.14 – $3.65
Volume
2.2B
Ripple USD (RLUSD 0.01%), the stablecoin issued by XRP’s issuer, Ripple, is also doing a lot of the heavy lifting, which is a good sign. RLUSD represents roughly 83% of the XRPL’s stablecoin market cap today, so it’s sufficiently large to be a useful pool of capital even for larger players. RLUSD growth is thus likely to pull in more counterparties and integrations that make the network a more appealing place for financial businesses to operate, which will in turn stimulate some demand for XRP.
2. Money is flowing even faster than before
Stablecoin transfers rising can often be an even more informative piece of information than stablecoin supply rising, because it hints that people are actually moving money rather than just parking it, which wouldn’t generate much of in the way of transaction fees or anything else that might bolster a native token’s price.
On that note, the XRPL experienced stablecoin transfer volume of about $1.2 billion over the last 30 days, up 57.5%. That’s a huge surge in volume, to say the least. If the trend of rising activity persists, it can support a bullish view in two ways.
First, more payments flow can attract more businesses and developers to build on the ledger, and they’ll need to buy and hold some XRP to do so, as every account is required to maintain a certain level of the coin in reserve. Those actors will also probably need to maintain a decent hoard of stablecoins on the chain, which will additionally increase the value of its ecosystem.
Second, more activity means more XRP is being used to pay transaction fees. But it’s important to note that only a minuscule amount of XRP is needed for each transaction, so transfer and spending activity will take a long time to translate into higher prices.
So, does this mean you should drop $2,000 into XRP today? Not quite. The crypto market is experiencing a brutal sell-off at the moment, and the coast might not be clear to deploy new capital just yet.
Keep an eye on this coin for the next few weeks, and it’ll likely be calm enough to make the purchase.