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Ripple, a leading player in the crypto space, has released its Q3 2023 XRP Markets Report. This report provides a comprehensive overview of the crypto markets, XRP's performance, and important developments within the industry. Ripple's commitment to transparency and proactive communication is evident in this report, which covers a range of topics, from market correlations to regulatory updates.
Crypto Markets in Q3:
In Q3 2023, the crypto market demonstrated increased independence from traditional macroeconomic assets. It relied more on industry-specific news and capital flows. Notably, Bitcoin (BTC) showed historically low correlation with the S&P at 0.23, and XRP also exhibited a low correlation of 0.16 during the same period.
However, the quarter was marked by significant market developments that impacted asset prices and liquidity. Hacks, rug pulls, and scams made headlines, resulting in nearly $686 million in losses. Security breaches on platforms like HTX and Mixin Network further added to the challenges. These events, coupled with volatility in traditional markets, led to reduced trading volumes.
XRP trading primarily occurred on major non-U.S. exchanges like Binance, OKX, and Upbit. Following the U.S. court's ruling in July, declaring XRP not a security, the token was relisted on several U.S. exchanges, including Coinbase and Kraken. Challenger exchanges emphasizing regulatory compliance gained market share, with Bullish experiencing substantial growth. XRP options markets also emerged with listings on Bit.com and Deribit.
Limited fresh capital inflow contributed to leverage within the crypto ecosystem. Market activity was driven by market-maker positioning and client flows, with interest levels resembling pre-2020 levels.
The report also highlights the anticipation surrounding spot BTC/ETH ETF approvals scheduled for Q1 2024, although the impact on capital influx remains uncertain. Global macro conditions, including developments in the Middle East, have added complexity to the market.
Update on the SEC Lawsuit:
Ripple secured significant victories in the legal battle against the U.S. Securities and Exchange Commission (SEC). On October 19, 2023, the SEC dismissed all charges against Ripple CEO Brad Garlinghouse and Executive Chairman Chris Larsen “with prejudice.” This dismissal is final, and no trial is scheduled for April. The case now proceeds to the remedies stage, where the court will determine any imposed remedies, considering that certain institutional sales were deemed as securities sales.
These victories follow earlier wins, including the July 13 ruling that XRP is not a security and the October 3 decision rejecting the SEC's bid for an interlocutory appeal.
Global Regulatory Developments:
While the U.S. faces regulatory ambiguity, Asian regulators have taken the lead in providing guidance and rulebooks for the crypto industry. Singapore's Monetary Authority of Singapore (MAS) granted Ripple a major payments institution license, alongside licenses for Coinbase and Sygnum. MAS also introduced a regulatory framework to enhance the stability of single-currency stablecoins. In the UK, the Financial Conduct Authority (FCA) called on crypto businesses to comply with new financial promotions rules, while a bill granting local authorities the power to seize crypto assets tied to crime awaits approval. G20 leaders are pushing for cross-border crypto frameworks.
Deep Dive: XRP Markets:
Ripple plans to publish standardized market metrics sourced from public databases, enhancing transparency and data accuracy.
- Chart 1 illustrates XRP price and realized volatility spikes on the days of the SEC decision (July 13) and a significant risk-off event on August 17. XRP ended the quarter with historically low volatility.
- Chart 2 displays XRP trading volumes, peaking at around $4 billion on the day of the Court decision but gradually cooling off to $300-400 million daily.
- Chart 3 highlights the dominance of stablecoins in XRP trading, with most exchanges trading XRP against USDT.
- Chart 4 showcases Binance as a major player in the XRP market, with US exchanges gaining ground.
The State of the XRP Ledger:
The XRP Ledger community continues to innovate, proposing features to support developers and enhance trust and safety for issued assets:
- XLS-30d AMM: This proposal introduces a non-custodial automated market maker (AMM) as a native feature on the XRPL's decentralized exchange (DEX). Developers can use XLS-30d AMM to create financial and non-financial applications, improving liquidity and asset availability.
- XLS-38d: This amendment enables a cross-chain bridge for bi-directional movement of XRP between XRPL Mainnet and XRPL Sidechain, fostering interoperability.
Community projects include NFTrade's integration with the XRP Ledger, becoming the first multi-chain NFT marketplace supporting XRPL. RWA Protocol launched $HOME, the first mortgage-backed stablecoin on the XRP Ledger, and Ducati introduced its first digital collectible on the XRPL.
On-Chain Activity:
Trading volume on the XRP Ledger's DEX surged over 3x in Q3, driven by several days of high trading volumes. On-chain activities, transaction volumes, and new wallet creations remained dynamic.
The report provides detailed statistics on transactions, XRP burned for fees, costs per transaction, average XRP closing prices, DEX volume, trustlines, and new wallets created.
Ripple's XRP Holdings:
Ripple reports its XRP holdings at the start and end of the quarter, including available XRP and XRP subject to on-ledger escrow lockups. These holdings are detailed for June 30, 2023, and September 30, 2023.
Ripple's Q3 2023 XRP Markets Report offers valuable insights into the crypto industry, XRP's performance, legal developments, and community achievements on the XRP Ledger. As the crypto market evolves and regulations take shape, Ripple remains dedicated to transparency and communication, ensuring stakeholders stay informed about the latest developments.
