Ripple Labs’ recent announcement about its plan to introduce a stablecoin on the XRP ledger has sparked a significant rally in the price of XRP. In just 24 hours after the news, XRP Open Interest, which represents the total amount of capital invested in futures derivatives markets, increased by 9% from $899 million to $981.2 million.
The price of XRP has been steadily rising over the past two days, gaining over 3% and approaching $0.60. Its market capitalization has also surged to $32.5 billion. This surge in price comes after Ripple Labs revealed its intention to launch a stablecoin on the XRP ledger, as reported by Crypto News Flash.
Ripple Labs plans to release its proprietary stablecoin later this year, which will be pegged 1-to-1 with the US dollar. The stablecoin will be backed by cash equivalents such as US dollar deposits, US government bonds, and other low-risk investments. With the global stablecoin market currently valued at $150 billion, dominated by Tether’s USDT, Ripple’s entry into this market presents a significant opportunity. By 2030, the stablecoin market is projected to grow 20 times to reach $2.8 trillion.
Monica Long, President of Ripple, highlighted the potential of introducing a credible stablecoin to the XRP Ledger, stating that it will enhance the overall ecosystem by leveraging XRP as the bridge currency and promoting increased adoption and development.
On-chain activities detected on April 4 indicate that XRP holders are strategically positioning themselves in anticipation of a positive price impact following the stablecoin announcement. The surge in XRP Open Interest reflects the influx of new funds into the market, with investors opening new positions at a faster pace than closing existing ones. This $82 million growth in Open Interest, coupled with a 3% increase in XRP price, suggests that fresh capital is flowing into XRP.
If this trend continues and the market deepens with increased liquidity, there is potential for XRP to break out towards $0.70. However, it is crucial for the XRP price to reclaim the critical $0.65 level to confirm this optimistic projection.