Summary
- XRP was reported to have significantly lagged Bitcoin, Ether, and Binance Coin (BNB) in price gains.
- The report said the main reasons for XRP's weak performance were rising circulating supply and weak investment demand, especially limited inflows from institutional investors.
- It said gains in XRP were capped by declines in cumulative net inflows to spot ETFs, spot and perpetual futures trading volume, and active addresses, as well as Ripple's business strategy and its legal dispute with the SEC.
Forecast Trend Report by Period
XRP has underperformed major digital assets such as Bitcoin and Ether, with rising circulating supply and relatively weak investment demand cited as the main reasons.
According to CoinDesk on October 16, XRP was trading at about $1.33, roughly 62.5% below its all-time high of $3.55 reached in January 2018. Over the same period, Bitcoin has gained 314% and Ether 66%. BNB, which has a market capitalization similar to XRP's, has risen about 2,800%.
A key reason for the weak price performance is the increase in circulating supply. Nikolai Sondergaard, a senior research analyst at Nansen, said XRP's circulating supply rose about 63% to 63.1 billion tokens from 38.7 billion in 2017. The increase diluted the value of individual tokens.
Even as supply increased, investment demand for XRP remained relatively weak. In particular, institutional inflows lagged those for Bitcoin and Ether.
Cumulative net inflows into U.S. spot XRP exchange-traded funds total about $1.8 billion, far below the levels seen by Bitcoin and Ether ETFs. Nansen said XRP spot trading volume fell 53.5%, perpetual futures volume dropped 44%, and the number of active addresses declined 10.7%.
Ripple's business strategy also appears to have weighed on XRP. Paul Howard, a senior director at Wincent, said Ripple has focused on cross-border remittances and payments infrastructure rather than areas attracting stronger investor interest, such as decentralized finance, or DeFi, and artificial intelligence.
XRP's long legal battle with the U.S. Securities and Exchange Commission was also cited as a factor limiting price gains. The lawsuit between Ripple and the SEC ended in August last year.
Uk Jin
wook9629@bloomingbit.ioH3LLO, World! I am Uk Jin.