XRP open interest skyrockets as Ripple tests its stablecoin RLUSD

Source Fxstreet
  • XRP open interest hit a peak of $1 billion on Sunday and decreased since then, down to $846 million on Wednesday. 
  • Ripple Labs tests its stablecoin RLUSD, minting large volumes of the asset and fueling interest among market participants. 
  • XRP steadies around support at $0.6000 and trades positive on the day. 

Ripple (XRP) has generated interest among derivatives traders as the payment remittance firm tests its stablecoin Ripple USD (RUSD). Ripple announced that the asset is awaiting regulatory approval and is geared toward institutions, not individuals. However, as the minting of RLUSD ramps up, there is a rise in open interest across derivatives exchanges. 

XRP holders likely consider it a positive development for Ripple since higher adoption of the firm’s payment infrastructure and services could boost the usage and adoption of the altcoin. 

Ripple stablecoin tests catalyze open interest increase in XRP

Ripple ramped up stablecoin testing efforts and minted large volumes of RLUSD in the past few weeks. The payment remittance firm made headlines as it minted 99% of the stablecoin’s total supply (800,000) in a 24-hour time period between September 28 and 29. 

Ripple’s stablecoin RLUSD has a total supply of 812,034 across two blockchains – Ethereum and the XRP Ledger. 

Ripple’s progress in the stablecoin project has emerged as a key market mover for XRP. 

According to data from Coinalyze, open interest (typically considered a measure of market activity) in XRP jumped to a peak of $1 billion on Sunday. Since then, it corrected to $846 million on Wednesday. 

Ripple

XRP Futures Open Interest (USD)

While Ripple stablecoin tests are underway, the payment remittance firm is working with regulators to obtain relevant licenses to drive the adoption of the financial services infrastructure. Ripple announced on Tuesday that the firm received a financial services license from the Dubai Financial Services Authority (FSA). 

Ripple can now offer services as a licensed firm to institutions within the UAE, likely to drive XRP Ledger and XRP token utility.

XRP holds steady around the psychologically important $0.6000 at the time of writing on Wednesday. 

Open Interest, funding rate FAQs

Higher Open Interest is associated with higher liquidity and new capital inflow to the market. This is considered the equivalent of increase in efficiency and the ongoing trend continues. When Open Interest decreases, it is considered a sign of liquidation in the market, investors are leaving and the overall demand for an asset is on a decline, fueling a bearish sentiment among investors.

Funding fees bridge the difference between spot prices and prices of futures contracts of an asset by increasing liquidation risks faced by traders. A consistently high and positive funding rate implies there is a bullish sentiment among market participants and there is an expectation of a price hike. A consistently negative funding rate for an asset implies a bearish sentiment, indicating that traders expect the cryptocurrency’s price to fall and a bearish trend reversal is likely to occur.

Disclaimer: For information purposes only. Past performance is not indicative of future results.
placeholder
Solana Price Forecast: SOL eyes record highs as institutional demand, on-chain metrics underpin rallySolana (SOL) price trades in green, above $242 at the time of writing on Monday, after breaking out of a parallel channel last week with bulls aiming for record highs.
Author  FXStreet
Sep 15, Mon
Solana (SOL) price trades in green, above $242 at the time of writing on Monday, after breaking out of a parallel channel last week with bulls aiming for record highs.
placeholder
Gold sits near record high as Fed rate cut bets keep USD depressedGold (XAU/USD) retreats slightly after touching a fresh record high, around the $3,689-3,690 region during the Asian session on Tuesday, amid some repositioning trade ahead of key central bank events.
Author  FXStreet
23 hours ago
Gold (XAU/USD) retreats slightly after touching a fresh record high, around the $3,689-3,690 region during the Asian session on Tuesday, amid some repositioning trade ahead of key central bank events.
placeholder
USD/CHF slumps to near 0.7900 as Fed dovish bets weigh on US DollarThe USD/CHF pair falls sharply to near 0.7915 during the European trading session on Tuesday.
Author  FXStreet
21 hours ago
The USD/CHF pair falls sharply to near 0.7915 during the European trading session on Tuesday.
placeholder
Forex Today: US Dollar remains weak pre-Fed, Gold hits new record-highThe US Dollar (USD) stays under modest bearish pressure early Tuesday as investors adjust their positions ahead of the Federal Reserve's critical two-day policy meeting.
Author  FXStreet
21 hours ago
The US Dollar (USD) stays under modest bearish pressure early Tuesday as investors adjust their positions ahead of the Federal Reserve's critical two-day policy meeting.
placeholder
NZD/USD Price Forecast: Maintains its bullish stance despite rejection at 0.5980The NZD has failed to breach 0.5980 resistance against the USD, but downside attempts remain limited so far.
Author  FXStreet
20 hours ago
The NZD has failed to breach 0.5980 resistance against the USD, but downside attempts remain limited so far.
Related Instrument
goTop
quote