Ripple Releases Q1 2024 XRP Markets Report

Ripple, the blockchain-based payment protocol and cryptocurrency creator, has released its Q1 2024 XRP Markets Report, providing insights into the state of crypto markets, relevant XRP Ledger and XRP-related announcements, as well as market developments during the previous quarter. The report represents Ripple's commitment to transparency and regular updates, demonstrating its belief in proactive communication and industry-wide trust-building.

Crypto Markets Summary

According to Ripple, there was a significant number of notable market developments in Q1 2024, including the continued demand for BTC Spot ETFs in the US, growth in centralized and decentralized exchange volumes, key regulatory and legal updates, and technical blockchain upgrades. The traditional institutional investors have recognized large asset managers as an entryway to the crypto market, as indicated by the continued volume and inflows.

Crypto traders have previously utilized leverage to gain exposure, however, markets are experiencing a mini-renaissance period. Key examples include ETF Authorized Participants hedging their inventory on the CME, projects like Ethena amassing $2B in delta-neutral assets, and funding rates entering unprecedented territory. Consequently, more trading infrastructure is demanded by participants like these. As prime brokers, settlement networks, and tri-party solutions become more common in the market, the velocity of trusted assets will likely increase, supporting the market's continued maturation and growth.

Global Regulatory Developments

Stablecoin regulation was a prominent topic as EU regulators published draft regulatory standards under Europe’s Markets in Crypto-Asset Regulation (MiCA) for stablecoin issuers. Additionally, Hong Kong introduced a regulatory sandbox for stablecoin issuers this year and the BIS issued regulatory recommendations for global stablecoin arrangements. In the U.S., Senators Gillibrand and Lummis introduced a new stablecoin bill, aimed at establishing a regulatory framework for payment stablecoins.

The Virtual Asset Regulatory Authority in Dubai granted a conditional virtual asset provider (VASP) license to Deribit, the Monetary Authority of Singapore (MAS) granted in-principle approval for its payment license to OKX, and South Africa’s financial regulator announced over 300 crypto asset providers sought approvals for a license in the country. The SEC reportedly also sent Wells Notices to Uniswap and Robinhood, while the DOJ charged KuCoin and its founders with violating anti-money laundering laws.

Deep Dive: XRP Markets

XRP spot volumes (Average Daily Volumes) surged to $865M in Q1 ‘24, a 40% increase from Q4 ‘23. Daily average XRP derivatives open interest was $500M in Q1 ‘24 vs $460M in Q4 ‘23. Spot volumes and open interest have continued to show a high correlation with general market activity, indicating robust XRP trading and activity across venues.

The industry also saw several technical upgrades that lowered the barriers of entry for individuals and institutions into crypto. These upgrades, combined with Tier-1 asset managers entering the space to offer not only ETFs but other securitized products, point to a new chapter in the road to mainstream adoption.

On the XRP Ledger, XLS-30 went live adding a non-custodial automated market maker (AMM) as a native feature to the XRPL’s decentralized exchange (DEX). This new feature was designed to provide on-chain liquidity and trading capabilities for DeFi developers and users.

Ripple’s XRP Holdings

Ripple reported its XRP holdings at the beginning and end of the quarter. Its holdings fall into two categories: XRP currently available in its wallets, and XRP subject to on-ledger escrow lockups released to Ripple on a monthly basis. The majority of the XRP released is put back into escrow each month.