- XRP trading stays depressed despite growing US exchange interest
- Asian regulators taking the lead on clear crypto guidance
- Fresh capital inflows needed to boost XRP liquidity
According to Ripple Insights, the crypto market struggles with low trading volumes, limited capital inflows, and damaging headlines. These challenges have put pressure on major cryptocurrencies like XRP despite some positive developments.
According to Ripple’s latest XRP Markets Report, crypto trading in Q3 drew few cues from broader macro assets. Bitcoin’s correlation to the S&P 500 hit record lows of 0.23, while XRP’s correlation was 0.16.
Instead, crypto prices responded more heavily to industry-specific events. Multiple hacks, rug pulls, and scams resulted in nearly $686 million in losses last quarter. A hot wallet breach at crypto exchange HTX led to $8 million in stolen Ether. Cross-chain protocol Mixin Network suffered a $200 million exploit.
These negative headlines, alongside ongoing stock market volatility, suppressed crypto trading volumes. Bitcoin saw some of its lowest daily books in years, averaging just $1 to 2 billion daily. XRP trading volume also tanked, falling to lows not seen since 2019.
XRP remaining relatively illiquid
Most XRP trading continues on major non-US exchanges like Binance, OKX, and Upbit. However, some US exchanges have relisted XRP following the court ruling that it is not a security.
Platforms like leads and cracks have added XRP trading, while challenger exchanges prioritizing regulatory clarity have seen growth. For example, Bullish has rapidly expanded since listing XRP. New options markets have also emerged.
Despite renewed US exchange interest, XRP liquidity remains relatively low. The broader crypto market also needs more capital inflows, with activity likely driven by market positioning.
All eyes now look to the expected launch of Bitcoin and Ether ETFs in early 2024. However, uncertainty persists regarding whether these new investment vehicles will attract significant fresh funds.
Ripple notches legal and regulatory wins
The SEC dismissed all remaining charges against Ripple executives, marking a significant coup for the company. With the SEC declining to impose remedies or a settlement, Ripple appears well-positioned to grow XRP use cases and adoption.
At the same time, Asian regulators have taken the lead in providing clear crypto guidance. Singapore’s central bank recently awarded Ripple a primary payments license. It also introduced a framework for regulating stablecoins.
Though the US lacks regulatory clarity, Ripple continues gaining ground legally and with overseas regulators. The company seems intent on expanding XRP’s utility through increased adoption.
However, the ongoing struggles of the broader crypto market present headwinds. Only when fresh capital flows into the space will XRP likely continue facing constrained liquidity and stagnant prices. For now, the path forward for XRP remains clouded by industry-wide uncertainty.