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CryptoQuant community analyst Maartunn provided insights revealing that the XRP Ledger’s (XRPL) velocity has increased over the last few weeks amid intensified activity, indicating a rise in utility within the network.
Velocity is determined by dividing a cryptocurrency’s market capitalization by its transaction volume. The analyst noted that a rising velocity signifies frequent utilization of the network. He also mentioned that this could serve as an early signal of a potential price increase for XRP.
XRPL’s velocity is nearing a resistance level in a descending trendline, indicating an uptick in usage and a possible price rise.
Importantly, the growth in XRPL velocity follows XRP’s price surge since the results of the US elections. The token experienced a significant rise from $0.5319 on Nov. 6 to a peak of $2.82 on Dec. 3 — a 430% increase within less than a month.
Despite the rise in velocity, the total amount deposited in the blockchain has been declining since Dec. 16, decreasing from $71.5 million to $58 million as of the latest update, according to data from DefiLlama. This decline represents an almost 20% drop.
XRPL’s total value locked is associated with the automated market maker (AMM) pools on the blockchain.
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In addition to the locked value, $5 million in tokenized treasury bills issued by Open Eden are currently in circulation on XRPL.
Developments to enhance growth
Ripple Labs, the organization behind the XRPL, recently introduced its stablecoin Ripple USD (RLUSD). The stablecoin will be issued on both the XRP Ledger and Ethereum.
Although the stablecoin was launched less than two weeks ago, Ripple aims to offer a regulated token pegged to the US dollar, which could promote the expansion of XRPL.
This growth may be propelled by traditional companies tokenizing real-world assets (RWA) on XRPL, as a liquidity stream would be established through RLUSD. The company even referenced this in their stablecoin announcement.
Bitwise anticipates that the RWA market could expand to $3 trillion in the near future.
The initiative to tap into this market has already commenced with Ripple’s partnership with Archax to launch a money market fund managed by abrdn. These developments could potentially further enhance XRPL usage and, as a result, its velocity.
The post XRP Ledger shows signs of increasing usage, suggesting XRP price increase appeared first on CryptoSlate.
