XRP owners breathed a collective sigh of relief after Ripple continued to pause sales of its native token. This now represents a total of six months in which the company has not benefited from “XRP dumping”.
The topic gained importance for the first time towards the end of 2019. At that time, XRP investors claimed that “XRP dumping” (or “programmatic sales”) caused some supply surges that led to price cuts. That, according to the community, was the main reason for the poor price development of the XRP share price during the entire last year.
However, while Ripple denied these claims, the company bowed to community pressure and suspended its “programmatic sales” since the last quarter. Ripple’s latest report shows a continuation of this deal.
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Ripple continued to hold back XRP sales in Q1
Ripple has recently released its market report for Q1 2020, which includes an update on what is happening in the company and the state of the XRP market.
The company started with a commentary on the macroeconomic situation. The report draws attention to “Black Thursday” and the resulting test of the safe haven status of digital assets, including XRP.
Although Ripple admits to some sort of recovery since then, due to the coronavirus situation, the leadership remains cautious about how things might develop in the coming months and years.
“Given the recession and the ongoing uncertainty about the extent of the long-term economic impact that this global crisis will have, we expect continued market volatility and an ongoing test for Krypto to prove a ‘safe asset class’.”
Analysis of Ripple’s sales showed that institutional direct sales (OTC) were $1.75 million in the first quarter of 2020. That is a significant decline from the previous quarter when sales totaled $13.08 million.
If OTC sales for the third quarter of 2019 ($50.12 million) are included in the quarter-on-quarter comparison, there was a significant decline in OTC sales. According to Ripple, OTC sales are used to build demand and liquidity in key regions.
In addition, Ripple continues to maintain the pause in the programmatic selling of XRP. This is good news for XRP owners who are concerned about oversupply in the stock markets.
Global volume increase for XRP
Based on data from CryptoCompate Top Tier (CCTT), XRP’s average daily volume (ADV) for the first quarter of 2020 was $322.66 million compared to $187.34 million for the previous quarter. This represents an increase of 72% over the fourth quarter of 2019 and a 63% increase over the third quarter of 2019 (ADV of $198.10 million). It represents an increase not only in average daily volume, but also the total XRP volume.
The report showed that total XRP volume in the first quarter of 2020 was $29.68 billion compared to $17.24 billion in the previous quarter. This represents an increase of 72% over Q4 2019.
Much of this success was attributed to Ripple’s ODL service, which, according to Ripple, continues to grow in both transaction volume and dollar value settlement.
RippleNet’s On-Demand Liquidity (ODL) service tripled transaction volumes and the value of dollar transactions increased by more than 294%.
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