Iris Coleman Aug 02, 2024 15:43
Ripple (XRP)'s Q2 2024 XRP Markets Report details market volatility, regulatory updates, and significant industry developments.
Ripple (XRP) has released its Q2 2024 XRP Markets Report, providing a comprehensive overview of market trends, regulatory wins, and significant industry developments, according to ripple.com.
Crypto Markets Summary
The second quarter of 2024 saw a continued focus on institutional adoption, highlighted by the approval of ETH spot ETFs in the US. This milestone, following the success of Bitcoin spot ETFs, is seen as a positive step toward a more mature market. Analysts predict that this could pave the way for other ETFs, such as Solana.
Macroeconomic factors like inflation, interest rate expectations, and unemployment rates influenced market sentiment. Bitcoin's (BTC) correlation to the S&P 500 increased to 0.4, up from 0.2 in previous quarters. The crypto market exhibited a “flight to quality,” with smaller cap tokens experiencing significant drawdowns while top ten market cap tokens fared better.
Market Volatility
The overall crypto market experienced volatility, with average daily trading volumes for BTC, ETH, and XRP falling 20% from Q1. BTC’s price briefly dipped below $60,000, influenced by factors such as the BTC halving in April and distributions related to the Mt. Gox legal battle.
Regulatory Wins
July marked the one-year anniversary of Ripple’s landmark win against the SEC, which provided regulatory clarity for XRP, declaring it not a security. Ripple is still awaiting a court decision on remedies related to institutional sales before December 2020. Additionally, the California Court dismissed all class claims against Ripple based on federal and state laws, except for one individual state law claim.
Global Regulatory Developments
The 2024 US elections are expected to be crucial for the crypto industry. Ripple donated $25 million to Fairshake, a federal super PAC supporting pro-crypto political candidates. This brings Ripple's total contribution to $50 million.
Globally, regulators are making strides to become crypto hubs. Hong Kong released consultation conclusions on a licensing regime for stablecoin issuers, and the Central Bank of Brazil announced plans for a regulatory framework for token creators and virtual asset service providers by year-end. In the Middle East, the UAE issued the Payment Token Services Regulation, and in Europe, the MiCA regulation came into force for stablecoins on June 30.
Deep Dive: XRP Markets
Ripple's report shows that XRP exhibited elevated volatility in the first half of Q2, with prices ranging from $0.43 to above $0.62. Realized volatility remained above 90% initially but decreased to around 45% as the quarter progressed. Binance accounted for a significant portion of XRP trading volume, with Bybit and Upbit also contributing substantially.
The State of the XRP Ledger
Ripple announced that the XRPL EVM sidechain would use Axelar as the exclusive bridge for sourcing the native gas token (eXRP) from the XRPL. This partnership aims to enhance interoperability and provide a secure bridge for users.
Key amendments include the introduction of oracles on XRPL, providing reliable data feeds for smart contracts and DeFi applications. The Multi-Purpose Token (MPT) standard, set to be released in Q3, will allow the creation of complex token structures representing various assets and rights.
Archax, a UK-regulated digital asset exchange, broker, and custodian, announced plans to bring hundreds of millions of dollars of tokenized RWAs onto the XRPL over the coming year. Ripple also launched a fund to support innovation on the XRPL in Japan and Korea.
Ripple USD
Ripple plans to launch a stablecoin, Ripple USD, later this year. The stablecoin will be 100% backed by US dollar deposits, short-term US government treasuries, and other cash equivalents. It will be available on both the XRP Ledger and Ethereum blockchains, with plans to expand to additional blockchains and DeFi protocols over time.
On-Chain Activity
On-chain activity across major protocols, including XRPL, decreased in Q2 compared to Q1. Transactions, XRP burned for transaction fees, and volume on the DEX all saw declines.
On-Chain Activity | Q1 2024 | Q2 2024 | QoQ |
Transactions | 251,397,881 | 86,388,029 | -65.6% |
XRP Burned for Transaction Fees | 636,183 | 495,770 | -22.1% |
Avg Cost per Transaction (in XRP) | 0.00147 | 0.00394 | +168.03% |
Average XRP Closing Price (in USD) | 0.56 | 0.52 | -7.1% |
Avg Cost per Transaction (in USD) | 0.000856 | 0.002064 | +141% |
Volume on DEX (in USD) | 64,857,084 | 37,126,655 | -42.8% |
Trustlines | 7,376,402 | 7,325,547 | -0.6% |
Number of New Wallets | 185,809 | 100,746 | -45.8% |
Ripple’s XRP Holdings
Ripple reports its XRP holdings at the beginning and end of each quarter. As of June 30, 2024, Ripple held 4.68 billion XRP, with 39.5 billion XRP subject to on-ledger escrow lockups.
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