Q1 2017 XRP Markets Report

Image: Shutterstock

In order to continually improve the health of XRP markets globally, we will share regular updates on the state of the market including quarterly sales, commentary on previous quarter price movement and related company announcements.

四半期販売状況
第1四半期において、Rippleの子会社でMoney Service Business(MSB)の登録ライセンスを保有するXRP II, LLC*から市場参加者は$6.7MMのXRPを購入しました。これらの購入主体の多くは法人であり、大量のXRP売却による市場への影響を緩和するために、購入者に対しては売却制限が設けられています。

Market Commentary: A Quiet Start to a Raucous Ending
Though Q1 2017 began much in the same way as Q4 2016, quietly, it ended with a dramatic spike in market activity.

1月と2月の間は、日次ボラティリティ**は2.47%まで低下しました。これはすでに3.26%という低いボラティリティを記録した2016年第4四半期よりも更に低い水準となりました。この2ヶ月の間に平均日次取引量は前四半期に比べて55%低い$1.22Mまで下がり、価格もゆっくりと低下し、一時、2016年5月以降最低水準である$0.00538にまで下がりました。これらの取引量や価格の低下の原因としては、少数の活発だったマーケットメーカーの一時的な市場退出や、BTCのETF承認を期待する投資家の一時的なBTCに対する需要の高まりが挙げられます。実際の原因はどうであれ、2017年第1四半期の始まりはXRPにとってここ最近の中で最も難しい市場環境となりました。

A bright spot was Bitstamp’s successful launch of XRP for USD, EUR, and BTC currency pairs on January 16th. That alone was not enough to turn the tide however, and XRP markets failed to show much life until March 23rd, what was easily the most significant day of the quarter.

On March 23, XRP rallied from $0.0072 to $0.0112, a 56% price increase on an impressive $19.7M in volume, a 1103% increase over the average daily volume up to that point in Q1. Clearly something had changed, but why such a powerful shift in sentiment? Though always difficult to discern in real time, in hindsight, a few key developments may have had an impact.

  • As the month drew to a close, the Bitcoin scaling debate raged on with no end in sight.
  • Throughout the quarter, Ripple, became more vocal about its commitment to XRP and the Ripple Consensus Ledger (RCL) as part of its long-term strategy.
  • Ripple announced a new relationship with BitGo to build an enterprise wallet, as well as Payment Channels and Escrow, important RCL features that increase transaction throughput to levels comparable with those of Visa’s network.
  • Ripple continued to sign up banks to commercially deploy its enterprise blockchain solution and join its global payments network. Announcements included the addition of MUFG, the world’s third largest bank, 47 banks in Japan and network expansion into the Middle East and India through NBAD and Axis Bank.

The last point is particularly important. Markets are clearly connecting the dots that banks which join the Ripple network today are prospective users of XRP liquidity in the future. Growing bank membership of the Ripple network creates opportunities for Ripple to deepen those customer relationships and cross-sell liquidity solutions built on XRP, all of which should be beneficial to the asset.

Lastly, there are a few data points which warrant close monitoring going forward. The percentage of off-ledger trading was only 25.2% in Q4, but that leapt to 71.1% in Q1. Interestingly, and very much related, the percentage of XRP flows that originated from BTC in Q4 was only 45.1%, and that grew to 66.6% in Q1. The data suggest most of the growth in trading volume is coming from off ledger BTC/XRP activity, which supports the theory that the rally in Q1 was driven by market recognition of Bitcoin’s risks, as well as XRP’s advantages.

Why is this significant? In Q1 2017, XRP grew substantially in both price and volume due to off-ledger inflows via Bitcoin. In order for any asset to be successful it needs ample liquidity, something XRP attracted during the quarter. This was a reassuring sign of progress towards the eventual fiat liquidity XRP requires to ultimately be successful for payments, its natural use case.

Q2 2017
We’ve put our ear to the ground and have been listening to important feedback from the XRP community. This includes the need for greater visibility and transparency into Ripple’s vision, strategic use cases for XRP, and plans to increase liquidity and decentralization. To that end, we plan to increase our communications cadence to address this feedback. We also look forward to having a large presence at Consensus in New York in May.

In addition, you may want to watch out for specific announcements in Q2 regarding potential ways to use RCL’s new Escrow feature, as well as our plan to implement a systematic markets operation program designed to add liquidity to the market especially during volatile periods.

Sign up to receive monthly XRP updates.

*XRP II, LLCはニューヨーク州金融サービス局から仮想通貨関連ビジネス活動を行うためのライセンスを取得しました。

**Volatility calculated using standard deviation of daily lognormal returns.