Ripple releases the quarterly XRP Markets Report to voluntarily provide transparency and regular updates on the company’s views on the state of crypto markets, relevant XRP Ledger and XRP-related announcements, and market developments over the previous quarter.
As an XRP holder, Ripple believes in “proactive communication and transparency, and urges others in the industry to build trust, foster open communication, and raise the bar industry-wide.”
As noted in a blog post by Ripple, there was “no shortage of notable market developments in Q1, including continued demand for BTC Spot ETFs in the US, centralized and decentralized exchange volume growth, key regulatory and legal updates, and technical blockchain upgrades.”
BTC ETFs registered total net inflows of “nearly $12B with cumulative trading volumes reaching $207B in just three months.”
BlackRock saw net inflows of $67B “across its 400-plus fund ETF range, and its iShares Bitcoin Trust (IBIT) notched roughly $13.9B. Given the continued volume and inflows, it’s clear that traditional institutional investors saw large asset managers as an entryway to access the crypto market.”
XRP spot volumes (Average Daily Volumes) surged “to $865M in Q1 ‘24, representing 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 exhibit high correlation with general market activity pointing towards robust XRP trading and activity across venues.”
The SEC Lawsuit Against Ripple
On March 22, the SEC submitted “to the Court their request for remedies against Ripple for its historic Institutional Sales of XRP.”
The SEC has asked the court “for ~$2B which comprises: (1) ~$900M in disgorgement; ~$200M in prejudgment interest on the disgorgement request; and (2) ~$900M in penalties. The SEC also asked for an injunction.”
Ripple filed its opposition “to the SEC’s request on April 22 pushing back on the SEC’s baseless request arguing that the law does not allow for disgorgement (or interest on disgorgement) where the SEC has not proven that anyone was harmed.”
Ripple argued that a penalty of “no more than $10M would be appropriate in a case that involves no allegations of fraud or recklessness.”
The SEC replied to Ripple’s brief on May 6.
In terms of next steps, both parties will wait “for the Judge to make a determination on the final remedies – likely in the coming months. Ripple remains confident that the Judge will approach the remedies phase fairly.”
As mentioned in the update, stablecoin regulation “was front and center as EU regulators published draft regulatory standards under Europe’s Markets in Crypto-Asset Regulation (MiCA) for stablecoin issuers.”
Due to come into force at the end of June, MiCA paves the way for global stablecoin regulation adoption and “will push the market to adopt increasingly stringent and more transparent compliance measures.”
Last quarter, on-chain transactions “increased by 108% and average cost per transaction decreased by 45%. Average transaction fee reached a high in December due to widespread testing of inscriptions on the XRPL. As such, the decrease in average cost per transaction indicated a reset and that no network congestion occurred in the quarter. For future reports, AMM volume will be included in the volume on DEX.”
Ripple’s XRP Holdings
Ripple reports information about its XRP holdings “at the beginning of the quarter and last day of the quarter. Its holdings fall into two categories: XRP that it currently has available in its wallets, and XRP that is subject to on-ledger escrow lockups that will be released each month over the next 42 months.”
For this latter category, Ripple does “not have access to that XRP until the escrow releases it to Ripple on a monthly basis. The vast majority of the XRP released is put back into the escrow each month.”
December 31, 2023
Total XRP Held by Ripple: 5,077,658,695 Total XRP Subject to On-Ledger Escrow: 40,700,000,005
March 31, 2024
Total XRP Held by Ripple: 4,836,166,156 Total XRP Subject to On-Ledger Escrow: 40,100,000,005
