Will XRP Make a Move or Continue Lagging
The past month managed to bring new all-time highs for multiple altcoins. Increased appetite for risk boosted both large-cap coins, as well as new arrivals and meme coins. But for months now, Ripple’s XRP has achieved more modest gains and is still far from its yearly high above $1.80.
XRP has also lost 50% of its value in BTC terms since May 2021, and is on a downward trend in the past month, sinking to 0.000017 BTC.
XRP traded at $1.06, moving sideways for most of October. The relative lack of rapid gains set some expectations XRP may be stagnant in comparison to more active coins and tokens. But XRP also sparked expectations that a more significant price move is overdue.
The expected price move is yet to materialize, once again underlining some skepticism about XRP. The asset trades at around $5B in volume per day, lagging behind DeFi tokens and the recently booming Dogecoin (DOGE) and Shiba Inu (SHIB).
Is the XRP Price Artificially Suppressed
The XRP asset has seen a shift in demand, especially during the course of a lawsuit launched by the US Securities and Exchange Commission (SEC). There is still no clear verdict whether XRP is a form of unregistered security, hence raising the risk of trading or owning the asset.
The ongoing pressure of the lawsuit caused XRP to be delisted from Coinbase, with no clear date of relisting. The latest comments on the SEC vs Ripple, Inc. case suggest the Commission may have to clarify its case.
XRP, formerly also known as Ripple, has been airdropped years ago to Bitcoin owners, and given away as an incentive. Some of the coins were also sold on the open market. So far, there is no evidence Ripple, Inc. sold the assets with the intention of a security contract.
However, US-based Coinbase users may have to wait longer for a relisting. The latest lawsuit developments suggest the process may extend until March 2022. Exposure to Coinbase trades lifted XRP to its peak prices in early 2018, when the asset briefly traded above $3.30. XRP is one of the few digital currencies that has not repeated its peak from the previous bull market.
XRP Escrow Selling Remains Low
One of the significant concerns for XRP is that each month, Ripple, Inc. can unlock one billion coins and potentially sell them on the open market. In 2021, only 500M XRP were unlocked each months, with most returned to treasury again.
The escrow scheme will continue until 2025, with a diminishing amount of unlocked coins each month.
Ripple Keeps Building International Payments
One of the value propositions for XRP is that it would be instrumental to making international payments. However, Ripple, Inc. keeps building payment channels and partnerships without explicit need for XRP.
Unlike other tokens, XRP is not instrumental to Ripple’s money transfers, unlike other networks and DeFi pools. In addition to the large supply of XRP, the asset has few use cases and is just stepping in as an asset with the potential for generating passive income.
Is XRP Becoming a DeFi Token
XRP has been attractive for its upside potential and its low per-unit market price. But now, the asset may reap the benefit of becoming a source of liquidity for DeFi purposes.
XRP owners had the chance to receive the native tokens of the Flare network after a snapshot of holdings in December 2020. Now, the same snapshot will be used to distribute the Songbird Network tokens.
The Songbird network airdrop program will also work for traders holding XRP in their Binance custodial wallet.
The upcoming SGB token will also be airdropped to Flare Network holders and supporters.
Why Meme Tokens May Get Ahead of XRP
In the past two days, DOGE and SHIB outperformed most other assets. DOGE returned to levels above $0.32, though remaining highly volatile. SHIB reached new price records, but returned to a more subdued range around $0.00006.
SHIB and DOGE remain more attractive due to their appeal to a new group of crypto investors and retail adopters. They are also more easily accessible through Binance trading pairs and Coinbase.
Another highly active asset displacing the appeal of XRP is Cardano (ADA). ADA Managed to keep close to $2, though still unable to break closer to $3. So far, ADA has few real-world cases and the Cardano network is behind on new project creation. Still, ADA is used as a volatile speculative asset for short-term gains.
XRP has a historical advantage of being one of the earliest digital assets, but it will have to re-establish its use cases and reputation to spark demand again.
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