- Ripple is accelerating plans to launch its RLUSD stablecoin
- It is facing competition from giants like USDT and USDC
As a seasoned analyst with over a decade of experience navigating the ever-evolving cryptocurrency market, I’ve seen my fair share of newcomers and established players vying for dominance. Ripple’s announcement of its stablecoin, RLUSD, is undoubtedly a significant step in their journey, but the response from the XRP community seems to be more of a shrug than a cheer.
Ripple recently unveiled further developments regarding the introduction of its stablecoin.
Although this update is typically considered beneficial for the ecosystem, the XRP market’s reaction thus far has been rather subdued or unenthusiastic.
Ripple begins stablecoin tests
In a blog post published on August 9, Ripple has announced the advancement of its stablecoin, Ripple USD (RLUSD). As part of this development, they have started beta testing for RLUSD on two prominent blockchain networks: The XRP Ledger (XRPL) and Ethereum‘s main network.
Moreover, Ripple clarifies that the value of XRP-IIP (Ripple’s USD stablecoin) remains consistent with the U.S dollar due to a 1:1 parity. The stability of this digital currency is ensured by holding a mix of U.S dollars, short-term U.S government bonds, and other liquid assets as collateral. This backing mechanism aims to preserve XRP-IIP’s worth and market stability.
While it’s important to note, Ripple explicitly stated that XRP-Indexed Stable Dollar (RLUSD) isn’t accessible for public buying or trading at this moment. This digital coin will become available for use once the beta testing is over and all necessary regulatory permissions have been secured.
Ripple’s competitors
In the vast, multi-billion dollar segment of the cryptocurrency world known as the stablecoin market, competition is fierce and a handful of significant players hold the majority. As Ripple readies to introduce its stablecoin, Ripple USD (RLUSD), it must contend with well-entrenched competitors like Tether (USDT) and USD Coin (USDC).
At present, the combined value of all stablecoins, as shown by data from CoinMarketCap at the time of writing, surpassed an impressive $170 billion. It’s also worth noting that Tether (USDT) leads this market significantly, boasting a market capitalization over $115 billion, making it the most influential stablecoin. USD Coin (USDC) follows closely in second place, with a market value exceeding $34 billion.
Besides DAI and FDUSD, other significant players in the stablecoin market include Tether (USDT) and TrueUSD, each holding over $50 billion and $1.9 billion in market capitalization respectively.
How XRP reacted to the news
Despite the potentially exciting news about Ripple, the market reaction of XRP appeared subdued.
According to AMBCrypto’s examination of the day-to-day chart, there was a substantial dip in the value of XRP, amounting to 5.81%, by the end of trading on August 9. This plunge caused the price to decrease from around $0.61 down to roughly $0.58.
Currently, as I’m typing this, XRP was showing a modest increase of almost 1% but not much more, roughly at the $0.58 mark. This minor uptick might indicate that the market hasn’t fully grasped the potential impact of the newly introduced stablecoin yet.
It could also mean other market factors are overshadowing this development.
How derivative traders moved
The lack of enthusiasm among traders for XRP was further reflected in the funding rate data from Coinglass. At press time, XRP’s funding rate stood at -0.0030%, indicating bearish sentiment among market participants.
– Realistic or not, here’s XRP market cap in BTC’s terms
As an analyst, I’d rephrase this by saying: When the funding rate is negative, it suggests that short-position holders are effectively paying a premium to maintain their bets on XRP‘s decline. This could be indicative of a higher number of traders anticipating a decrease in XRP’s price compared to those who believe it will increase.
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2024-08-11 04:08