Ripple publishes the quarterly XRP market report to voluntarily provide transparency and regular updates of the company’s views on the state of the XRP market, including quarterly programmatic and institutional sales updates, relevant XRP-related announcements such as Xpring and RippleNet partnerships, and comments on market developments in the Previous quarter.
As an XRP owner, Ripple believes that proactive communication and transparency are part of being a responsible stakeholder. Additionally, Ripple urges others in the industry to follow suit to build trust, encourage open communication, and raise the bar across the industry.
Disciplined, Responsible Stakeholders: Continuing the break in programmatic XRP sales
In the second quarter of 2020, total XRP revenue was $ 32.55 million ($) compared to $ 1.75 million in the previous quarter. Ripple continued on the pause in programmatic selling and focused solely on over-the-counter (OTC) sales to provide increased XRP liquidity to RippleNet’s on-demand liquidity (ODL) customers. This additional liquidity is vital as ODL continues to evolve and expand into new corridors.
A healthy, orderly XRP market is required to minimize costs and risks for customers, and Ripple plays a responsible role in the liquidity process. The more financial institutions that use RippleNet’s ODL service, the more liquidity will be added to the XRP market. Even so, Ripple was a buyer in the secondary market and may continue to make purchases at market prices in the future.
Total sales (only OTC, with a programmatic break) ended the quarter with 18 basis points of the CryptoCompare TopTier volume. This is compared with the total sales of the previous quarter (only OTC, with programmatic break) of 0.60 basis points CryptoCompare TopTier.
|Sales overview (Dollars to millions)||Q1 2020||Q2 2020|
|Institutional direct sales (OTC)||1.75||32.55|
|Global XRP volume||Q1 2020||Q2 2020|
|ADV XRP (Dollars in millions) **||322.66||196.28|
|Total XRP volume (Billion dollars)||29.68||17.86|
|Total sales in% of the total volume||0.006% *||0.18% *|
* Percentage is calculated by dividing actual Ripple Dollar Revenue by the total reported XRP Volume in Dollars.
** Note: Numbers were generated using the CryptoCompare API for TopTier Daily Aggregate Volumes, which reflect total XRP volume in US dollars by exchanges that CryptoCompare is listing in TopTier at the end of the second quarter. Ripple continues to rate its benchmarks in the face of challenges like false volume that persist in the industry.
The daily volume reported by CCTT for XRP decreased in the second quarter of 2020 compared to the first quarter of 2020. Average daily volume was $ 196.28 million in the second quarter compared to $ 322.66 million in the first quarter.
The standard deviation of XRP’s daily returns from the second quarter was 3.0%, a decrease in volatility from 6.2% in the first quarter. XRP’s volatility was lower than Bitcoin’s (3.4%) and lower than Ethereum’s (4.2%) for the quarter.
In the second quarter of 2020, three billion XRPs were released from escrow (one billion per month). A total of 2.6 billion XRP were returned in the quarter and then incorporated into new trust agreements. Further information on the fiduciary process is available here. Note: All numbers are based on transactions that occurred during the quarter.
On-Demand Liquidity (ODL)
Financial institutions are seeing more than ever the value of RippleNet’s ODL service to provide instant, global payments and meet market demand, especially during times of crisis due to the risk and increased volatility. In the second quarter of 2020, ODL accounted for almost 20% of RippleNet’s volume. Compared to the first half of 2019 with the first half of 2020, RippleNet recorded an 11-fold increase in the ODL transaction volume compared to the previous year.
Ripple identified wire transfers as the main use case early on and will continue to focus on supporting low value, high frequency payments with ODL. Ripple is reducing its focus on large treasury payments, traditionally used to fund businesses and services without real-time transfers, to support single, low-value transactions and to meet the growing need for wire transfers as well as small and medium-sized business payments.
XRP integrations and liquidity updates
Developing liquid and robust markets is the key to ODL’s success. Numerous integrations were made in the second quarter of 2020 that contributed to the health of the XRP markets. Notably, Binance has launched exchange-traded XRP options contracts. In the derivatives area, XRP perpetuals can now be found at all five top derivative locations after Huobi DM introduced XRP perpetuals in April 2020.
Other notable integrations from Q2 2020 include:
- Sygnum Bank, the first fully regulated crypto bank, has added XRP to their highly regulated custody solution and financial platform.
- Similarly, Zero Hash has incorporated XRP into its settlement platform, giving companies with digital assets access to US markets. Zero Hash is a division of Seed CX, a registered CFTC swap execution facility and a BitLicense holder of the New York Treasury.
- Swisscom Blockchain, one of the largest telecommunications providers in Europe, has successfully introduced XRP on its DAPPI platform and thus enables companies to access the XRP ledger for a variety of use cases.
Ripple is hoping for further development of the XRP infrastructure in the coming months, particularly in the derivatives space, which will further solidify XRP as one of the top three digital assets and contribute to its resilience and liquidity.
Liquidity and volume
In terms of total liquidity and volume, XRP ended the quarter as the fifth most traded digital asset as measured by rolling 30D volume. XRP volume remained relatively strong as the total volume of digital assets declined in the second quarter of 2020. There were more than 85 million transactions in total on the XRP ledger, and XRP’s Adjusted Transfer Value Ratio (NVT) was 200,512 – the highest of any digital asset in the second quarter. The NVT ratio compares market capitalization to transaction usage in the chain, making it a good determination of the utility of an asset. XRPL also recorded total transaction fees through the ledger totaling $ 20,138 – the lowest of any digital asset in the second quarter.
XRP is useful for transporting trade collateral between venues amid an increasingly fragmented crypto infrastructure. As highlighted in the last report and separately in this blog post, XRP is cheaper, more reliable, and faster than other assets. There is evidence of an increase in exchange transfers with XRP versus comparative coins during the market stress caused by COVID-19 in early March 2020. Ripple strongly believes that XRP can help make digital asset markets more efficient than efficiency for a fragmented global payments market.
In June, Xpring, Ripple’s open developer platform for money, partnered with over 46 companies including Blockchain.com, BitPay, Brave, Flutterwave, BitGo, GoPay, Care and Mercy Corps to introduce PayID – a universal payment ID to simplify the shipping process and Receive money globally via any payment network and currency, including XRP. The companies worked together to develop the open source solution as part of the Open Payments Coalition, which together reaches over 100 million consumers.
- The Office of Comptroller of Currency (OCC) named Brian Brooks as acting comptroller. Brooks plans to launch a new payment charter in hopes of creating a unified federal framework for technology firms to offer services traditionally offered by banks. The OCC also issued an expanded notice on the proposed rulemaking requesting, among other things, comments on US banks’ takeover of crypto-related activities.
- Former CFTC Chairman J. Christopher Giancarlo published a paper explaining why XRP should not be considered a security under US law and precedent. He also heads the Digital Dollar Project, which published a white paper on his proposal for a joint public-private initiative to create a digital currency from the US Central Bank (CBDC).
- The Consumer Finance Protection Bureau (CFPB) has released its final remittance rule, including how digital assets, especially XRP over ODL, can help cut the cost of cross-border transfers significantly.
- India’s Treasury Department proposed to legally ban cryptocurrencies and impose severe penalties on citizens who use cryptocurrency. This follows previous actions by the Indian Reserve Bank to make a clarifying statement that Indian commercial banks could provide banking services to merchants and companies that trade in cryptocurrencies.
- The Intergovernmental Financial Working Group (IFWG) of South Africa has published a position paper proposing a strict crypto-political framework for the region.
- SEC Commissioner Hester Peirce has been nominated for a further five-year term with the securities agency. Caroline Crenshaw was also nominated to fill a Democratic post on the Commission. Your confirmation negotiations were scheduled for July 2020.
- The EU is aiming to create a new regulatory regime for digital assets, covering unregulated assets up to stable coins.
- Macro investor Paul Tudor Jones bought Bitcoin as an inflation hedge and said his fund could hold up to a low single-digit percentage of its assets in Bitcoin futures.
- JPMorgan offered bank accounts for cryptocurrency exchanges, starting with Gemini and Coinbase.
- Of nearly 800 institutional respondents who took part in a Fidelity survey, 36% said they owned either digital assets or derivatives.
- The New York Treasury Department issued Eris X BitLicense.
- Users pulled over $ 220 million in BTC from the exchanges before and just after the halving in May.
- China has completed development of the backend architecture of its digital yuan. The rapid development of the digital yuan made headlines about China’s potentially powerful influence and leadership in the payments industry.
- People’s Bank of China (PBOC) announced a pilot program to test their new digital yuan with 19 local companies, including US chains Starbucks, Subway and McDonald’s.
- PayPal and Venmo plan to expand their platforms to buy and sell crypto.
- Brazil stopped the WhatsApp payment service just a week after it was first launched.
- Visa signed a partnership agreement with Safaricoms M-Pesa.
- Binance has launched a crypto payment app in Nigeria.
- Revolut announced that it is making cryptocurrency available to all seven million customers.