Ripple’s Q1 report has sparked bold predictions about the future of XRP, with one analyst suggesting that Ripple’s upcoming stablecoin will soon dominate the USDT market as Tether faces regulatory challenges.
In its first quarter market report, Ripple highlighted significant milestones achieved by the company and XRP in the first three months of the year. The report received positive reviews, noting increases in trading volume and new features for the XRP Ledger (XRPL). Since its publication, analysts have been analyzing the report and sharing insights on what it means for the future of Ripple and the XRP community.
One notable insight, according to an analyst, is that Ripple is moving away from relying on XRP as its primary source of income. The company typically sells tokens held in escrows every quarter to fund operations and the development of the XRPL ecosystem, as well as partnerships with payment market participants. While some critics argue that this model puts stress on the token’s market, Ripple has dismissed such claims.
However, Bearable Bull, a popular analyst with a substantial following, suggests that the shift away from token sales may be part of a settlement agreement with the SEC in the ongoing lawsuit. The agency has been scrutinizing the token sale model since filing the lawsuit several years ago.
The analyst also points out that Ripple’s upcoming stablecoin will play a crucial role in the company’s future. Ripple plans to launch the stablecoin later this year, leveraging its market connections and regulatory clarity, particularly after the conclusion of the SEC lawsuit. This positions Ripple favorably compared to other firms in handling such a token.
The stablecoin will be particularly important if Ripple intends to reduce its reliance on XRP sales as its primary income stream. Tether, for example, generated $2.85 billion in the last quarter of 2020 from US Treasury bond interests and the appreciation of gold and BTC held in reserves.
Tether is an attractive target for Ripple’s stablecoin. With a market cap of $111 billion, Tether continues to dominate the market, surpassing USDC and DAI. However, Tether has faced regulatory scrutiny and has settled multiple cases related to unethical practices.
Before challenging Tether’s market position, Ripple needs to address the SEC’s claims that its stablecoin is an unregistered security offering, as reported by Crypto News Flash.
The analyst further suggests that custody solutions could be another income stream for Ripple. In 2020, the company acquired Metaco, a Swiss-based crypto custody firm, for $250 million. This strategic move could position Ripple as a major player in the crypto custody market.
In conclusion, Ripple’s Q1 report has sparked optimism about the future of XRP, with analysts predicting the rise of Ripple’s stablecoin and its potential to compete with Tether in the stablecoin market. The report also suggests that Ripple is diversifying its income streams and exploring opportunities in the custody market.