Quarter-over-quarter, Ripple saw a 54 percent surge in institutional investment, indicating an overall rise in demand for crypto from institutional investors.
Bad Year So Far For Ripple and XRP?
XRP saw a three-fold gain at the start of the fourth quarter in 2018. But, as the market began to stagnate in December, the price of XRP performed poorly against the U.S. dollar.
Year-to-date, XRP is down 13.67 percent based on the market data from OnChainFX. In comparison to bitcoin, ethereum, and bitcoin cash, which recorded 48 percent, 23 percent, and 78 percent gains respectively, XRP has had a poor start in 2019.
But, according to the report, the average XRP daily volume has increased to $595 million, up from 2018.
“While the price of XRP decreased, the average XRP daily volume was $595.28 million which is on par with XRP daily volume from Q4 2018. In addition, XRP’s correlation with other top digital assets remained consistently high throughout the quarter,” the report read.
It is unclear whether the daily volume of XRP calculated by Ripple accurately portrayed the crypto exchange market landscape and particularly the presence of large fake orders and inflated volumes in the market.
In March, Bitwise Asset Management estimated that 95 percent of volume in the crypto market is likely to be faked or inflated.
1/ New Research from us @BitwiseInvest.
As part of 226 slides presented to the SEC on our ETF filing, we did a first-of-its-kind analysis of *order book data* from all 81 exchanges reporting>$1M in BTC volume on CMC.
TLDR: 95% of reported volume is fake but LOTS of good news! pic.twitter.com/TuXLlDCRyP
— Bitwise (@BitwiseInvest) March 22, 2019
Institutional Interest is Crucial For Ripple
For Ripple, institutional interest and demand could be as important as retail interest because the value of the Ripple blockchain network and solutions on top of it, mainly as liquidity solutions, come from the banks and financial institutions committed to the Ripple blockchain.
The noticeable increase in the investment into Ripple by institutions in the first quarter of 2019 suggest that institutions have become more comfortable regarding two main aspects of XRP:
- The regulatory nature of XRP and the pending court case that would clarify whether XRP is considered a security or not under U.S. regulations
- The long-term roadmap of the Ripple blockchain and XRP as liquidity solutions for banks
The addition of 13 financial institutions by Ripple on RippleNet at the beginning of the first quarter of 2019 likely played a key role in fueling the interest of institutions, especially in the Japanese market.
The Ripple team said:
At the start of the quarter, Ripple announced RippleNet surpassed more than 200 customers worldwide, with the addition of 13 new financial institutions that signed up for the company’s payment network. These companies include Euro Exim Bank, SendFriend, JNFX, FTCS, Ahli Bank of Kuwait, Transpaygo, BFC Bahrain, ConnectPay, GMT, WorldCom Finance, Olympia Trust Company, Pontual/USEND and Rendimento.
For the long-term sustainability of Ripple and XRP, it is of the utmost importance for investors that Ripple continues to secure high profile partnerships with banks and find convincing ways to prove that XRP is not a security in the U.S.
The Ripple team has said that while smaller companies and projects without clear use cases have suffered during the 16-month long bear market, it believes the bear market will ultimately benefit the market in many ways.
“Overall, this is positive for the industry as legitimate businesses gain traction and scams and non-businesses fall by the wayside,” the document read.
About The Author
Hong Kong-Based Finance and Cryptocurrency Analyst. Contributing regularly to CCN and Hacked. Providing unique insights into the crypto and fintech space since 2012.