Ripple publishes the quarterly XRP market report to voluntarily provide transparency and regular updates of the company’s views on the crypto status in general including the XRP market, e.g. B. Quarterly sales updates, relevant XRP-related announcements 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.
The first quarter of 2021 was an exceptionally strong time for crypto. The total market cap for crypto rose from ~ $ 800 billion to nearly $ 2 billion in three months, and the institutional takeover was again a major driver of that gain. Morgan Stanley and Goldman Sachs individually announced plans to add BTC to their wealth management offerings while BlackRock began trading BTC futures.
Over $ 3 billion worth of BTC ended up on the balance sheets of public companies, roughly the value of all institutional purchases in 2020. The industry saw a major commercial use case when Tesla announced it would accept BTC directly for payments. While crypto has been in commercial use for years, including BitPay and Ripple’s on-demand liquidity solution, Tesla is one of the earliest examples of a large non-financial services provider entering the industry.
As more sophisticated participants entered the room, the markets also became more leveraged, as evidenced by the growth in derivatives markets. Open interest in BTC and ETH futures tripled in the first quarter of February, bringing open interest up from 0 in the quarter to $ 150 million. Open interest in XRP futures doubled from $ 250 million to $ 500 million. That number temporarily rose to $ 2.1 billion in the first two weeks of the second quarter.
The growth in leverage is further illustrated by the number of forced liquidations in the first quarter. Three separate events individually contributed to $ 1.5 billion liquidations on derivatives exchanges when BTC price fell just 10%. To put this in perspective, the 50% BTC crash in March 2020, dubbed Black Thursday, resulted in liquidations totaling $ 1.4 billion.
The state of US crypto regulation
As we said from the start, the SEC’s lawsuit against Ripple will have profound implications for the crypto and fintech industries as a whole. A healthy market requires regulatory clarity and consistency, but the SEC’s current approach – regulation through enforcement – has brought chaos to U.S. XRP owners, developers, content providers, and small businesses who use and rely on XRP and the XRP ledger . The U.S. crypto industry needs a clear path forward, and we hope that as the lawsuit progresses, the outcome will provide all U.S. market participants with some of the regulatory security that is badly needed for the industry to mature and advance.
Key litigation updates since last report:
- On April 22nd, the SEC filed a motion against Ripple’s lack of trial and fair notice defense. It stated that the SEC failed to adequately warn both Ripple and the broader market that XRP was being viewed as an investment contract.
- On April 19, attorney John Deaton filed a petition for intervention on behalf of more than 12,000 XRP owners (and others) alleging that the SEC did not represent their interests, and indeed violated them.
- On April 16, Ripple filed a motion to prevent the SEC from contacting foreign regulators to seek a discovery outside of the rules of federal procedure and the Hague Convention on the matter.
- On April 6, Ripple’s motion to force the discovery was largely upheld by the court. The SEC is required to submit documents on BTC, ETH and XRP.
- On March 19, Ripple prevailed in its lawsuit against Tetragon, a Ripple investor. The judge said that in the absence of an official statement regarding the status of XRP, Tetragon’s claim that a “securities default” as defined in its investment papers had occurred was false. Ripple also received attorney fees and expenses of $ 3.5 million.
The on-demand liquidity (ODL) momentum continues
To meet the growing demand for ODL, Ripple agreed to acquire 40% of Asia’s leading cross-border payment specialist Tranglo. This partnership will help Ripple expand ODL’s reach to the APAC region, from Southeast Asia to supporting existing corridors like the Philippines.
Disciplined, Responsible Stakeholders: Q1 Sales and Purchases
For the last quarter, Ripple’s total XRP revenue after purchases was $ 150.34 million ($ 150.34 million, down from $ 76.27 million in the previous quarter. The increase in XRP sales is due to increased engagement from key ODL customers. Ripple has stopped selling programmatically for well over a year.
Ripple continued to be in sales to assist ODL and key infrastructure partners to increase XRP liquidity, improve the ODL experience of certain customers, eliminate the need for pre-financing, and enable instant global payments.
Ripple’s total sales after purchases ended the quarter at 7 basis points, or 0.07% of global XRP volume, based on CryptoCompare TopTier (CCTT) volume. According to the CCTT, this is compared with total sales of 5 basis points in the previous quarter.
|Sales overview (Dollars to millions)||Q4 2020||Q1 2021|
|Total sales related to ODL *||111.12||150.34|
|sales (minus purchases)||76.27||150.34|
|Global XRP volume||Q4 2020||Q1 2021|
|ADV XRP (Dollars to millions)||1,610.25||2,264.26|
|Total XRP volume (Dollars in billions) **||148.15||203.78|
|Net sales in% of total volume||0.05%||0.07%|
* ODL-related sales include lease, OTC, and XRP sales in support of ODL (including line of credit) and key infrastructure partners.
** Note: The numbers were generated using the CryptoCompare API for Daily TopTier Aggregate Volumes, which reflect the total XRP volume in US dollars by exchanges that CryptoCompare lists in the TopTier. Ripple continues to evaluate its benchmarks in the face of challenges such as false volume that persist in the industry.
Certain wallets used for XRP sales also offer short term leases to market makers. This is worth noting as they are often misrepresented as sales by market participants. Leases will ultimately be returned to Ripple.
The daily volume reported by CCTT for XRP increased significantly in the first quarter of 2021 from the fourth quarter of 2020. The average reported daily volume was $ 2.26 billion in the first quarter compared to $ 1.61 billion in the previous quarter. In particular, XRP volumes saw four of the highest volume days ever.
The standard deviation of XRP’s daily returns from the first quarter was 9.0%, a decrease in volatility from 9.6% in the fourth quarter. XRP’s volatility was higher than that of BTC (3.4%) and ETH (4.4%) for the quarter.
In the first quarter of 2021, three billion XRPs were released from the escrow account (one billion per month) as per the previous quarters and the official escrow agreement. A total of 2.7 billion XRP were returned and then incorporated into new trust agreements throughout the quarter. Further information on the fiduciary process can be found here. Note: All numbers are based on transactions that occurred during the quarter.
Last quarter there was a slight spike in conversations about Ripple’s “flooding the market” as many continue to misunderstand the mechanics of the escrow process, which are simply transfers between Ripple treasury and escrow accounts. In other words, these transmissions do not conform to XRP’s ripple distribution.
Ripple is committed to transparency, as this quarterly market report shows. As mentioned above, XRP sales and distributions (e.g. leases that are returned to Ripple) can be mapped to ODL. Ripple plays a responsible role in the liquidity process. Outside of Ripple, however, there are large XRP holders, as is the case with other major cryptocurrencies like BTC and ETH.
The data shows that Q1 2021 was a quarter of the XRP accumulation. The number of “whale” wallets, defined as wallets with a balance of at least 10 million XRP, increased from 308 to 319. Similarly, the number of wallets with a capacity between 1 million and 10 million XRP increased from 1,125 to 1,196.
Similarly, ETH also recorded significant accumulation. The number of wallets with at least 1,000 ETH increased from 1,178 to 1,253 in the quarter.
During the last quarter, the number of active XRPL wallets increased as the general ledger activity increased. In the first quarter, total ledger payment volumes were $ 62.3 billion, up 23% from the previous quarter, while the total number of general ledger addresses rose 15% from 2.35 million to 2.70 million rose.
The global XRP infrastructure saw significant developments and innovations in the first and early second quarters, including:
- Bitrue, A cryptocurrency trading platform that added multiple XRP pairs and saw significant growth as the daily trading volume increased by 400%. In addition, Bitrue launched a FLR / XRP pair that traded IOUs of the Spark token, which are to be distributed in the second quarter.
- Independent reserve, one of the largest crypto exchanges in Australia, launched XRP / SGD and XRP / USD trading pairs.
- Kucoin Exchange added an XRP / USDC pair.
- The multibank group was founded MEXBIT, an exchange for institutional clients to provide asset services including XRP.
- Lykke re-listed XRP, referring to the token’s ability to bridge the gap between blockchain and traditional funding.
In addition, Wanchain and Huobi ECO Chain (HECO) built cross-chain bridges to the XRP ledger and added new integrations into DeFi. Regardless, CoinShares, the largest crypto asset manager in Europe, launched an exchange-traded XRP product on the primary Swiss exchange SIX and reported a significant increase in XRP inflows.
Broader XRP community
For developers and entrepreneurs, the past quarter offered new opportunities to create various use cases in the XRP ledger as interest in crypto continues to grow. While no company or individual can track every project built on this open source technology, there are hundreds of use cases, from cross-border payments to loans to marketplaces and custody solutions.
- Travala, a blockchain-based travel booking platform used by thousands of customers worldwide, accepts cryptocurrencies as payment.
- Uphold offers a debit card that consumers can use to pay in cryptocurrencies and fiat.
- Wirex offers customers a travel card to exchange and spend crypto currencies.
- Puma Browser is a private, mobile Web3 browser that makes it easy to support micropayments and pay creators with cryptocurrencies.
- Forte provides game developers with tools to integrate blockchain technology and crypto into new and existing games.
- Audiotarky is a streaming platform where artists and labels are paid directly with crypto for downloads.
Developers are building on the XRPL to take advantage of its green attributes and unique features and add value. The XRP ledger is the first major climate-neutral blockchain and is inherently energy efficient. It reduces the high energy consumption and costs developers face in building proof-of-work blockchains.
Ripple is just one player in a wider community built on the XRP ledger. For more information, see xrpl.org and the GitHub project repositories.