XRP has recently become a focal point for investors, driven not only by its price surge but also by enhanced liquidity in US-based exchanges. This increased liquidity makes these platforms more appealing to large-scale traders looking to execute sizable transactions efficiently.
Why is XRP Liquidity Increasing?
On Thursday, US exchanges such as Coinbase and Kraken reported a significant rise in liquidity, reaching $1.12 million in 1% market depth. This represents a 30% increase compared to offshore exchanges like Binance and OKX. The 1% market depth metric indicates that transactions worth $1.12 million need to occur to move the spot price by 1% in US exchanges, while a smaller volume achieves the same effect offshore.
Market depth measures the ability to handle large orders without significantly impacting the market price. Higher depth facilitates the execution of large transactions with minimal slippage. Concurrently, XRP trading volume in US exchanges is on an upswing, even though offshore exchanges still dominate. Currently, US exchanges account for 14% of the global XRP volume, a level last seen four years ago.
What Happened with the SEC and Ripple?
The surge in US exchange liquidity is partly attributed to easing regulatory concerns for XRP. Last year, Ripple Labs scored a partial victory in its legal battle with the SEC, which ruled that Ripple’s institutional sales of XRP were not unregistered securities offerings. This decision has spurred growing demand for XRP in the United States.
Earlier this week, a court fined Ripple $125 million for its institutional sales of XRP. This fine was considerably lower than the $2 billion initially sought by the SEC, leading to a 20% jump in XRP’s price. The ruling is seen as a positive indicator for Ripple’s market presence, liquidity, and XRP’s future pricing.
Key Takeaways for Investors
Concrete Inferences:
- US-based exchanges are becoming more attractive to large-scale XRP investors due to increased liquidity.
- The favorable court decision has reduced regulatory risks, boosting investor confidence in XRP.
- Despite the rise in US trading volume, offshore exchanges still lead in global XRP transactions.
- The recent court ruling and subsequent fine are seen as positive developments for XRP’s market prospects.
These factors collectively indicate a promising outlook for XRP in the US market, both in terms of liquidity and price stability.
