CryptoQuant community analyst Maarunn shared data indicating that the speed of the XRP Ledger (XRPL) has increased in recent weeks due to increased activity, indicating growing utility within the network.
Speed is calculated by dividing the market capitalization of a cryptocurrency by the transaction volume. The analyst pointed out that increasing speed represents frequent network usage. He added that this could be an early indication of an impending price rise for XRP.
XRPL’s velocity is approaching resistance in a descending trend line, indicating growth in usage and potential price appreciation.
It is striking that the speed growth of XRPL follows the price jump of XRP since the outcome of the US elections. The token saw a remarkable rise from $0.5319 on November 6 to a peak of $2.82 on December 3 – a 430% increase in less than a month.
Despite the increase in speed, the total deposited into the blockchain has fallen since December 16, from $71.5 million to $58 million at the time of writing, according to facts from DefiLlama. This move represents a slump of almost 20%.
The total value of XRPL is tied to the blockchain’s automated market maker (AMM) pools.
In addition to the locked value, $5 million worth of tokenized treasury bills issued by Open Eden are circulating on XRPL.
Developments to stimulate growth
Ripple Labs, the company behind the XRPL, recently launched its stablecoin Ripple USD (RLUSD). The stablecoin will be issued using the XRP Ledger and Ethereum.
Although the stablecoin launched less than two weeks ago, Ripple’s goal is to provide a regulated token pegged to the US dollar, which could fuel XRPL’s growth.
The growth could be driven by traditional companies tokenizing real-world assets (RWA) on XRPL, as a liquidity flow would be created through RLUSD. The company even mentioned this in their stablecoin announcement.
Bitwise estimates that the RWA market could grow to $3 trillion in the near future.
The push to tap into part of this market already started with Ripple’s partnership with Archax to launch a money market fund managed by abrdn. These developments could potentially further boost the use of XRPL and therefore its speed.
