Ripple released Q4 2022 XRP Markets Report

Company Ripple released Q4 2022 XRP Markets Report.

Company Ripple recently released Q4 2022 XRP Markets Report. The key points of the report are as follows:

On Demand Liquidity (ODL), Ripple’s crypto-enabled cross-border payments solution, launched in France, Sweden and Africa, now available in nearly 40 payouts markets.
Total XRP sales by Ripple, net of purchases, were $226.31M vs. $310.68M the previous quarter.
Peersyst released the first phase of the Ethereum Virtual Machine (EVM) sidechain for the XRP Ledger (XRPL) on Devnet which allows DeFi applications like Uniswap, Aave and Compound to easily launch on the XRPL.

Q4 of 2022 was marked by immense headwinds for both crypto and the larger macro stage. Liquidity in crypto markets suffered due to the collapse of FTX, while risk assets broadly traded poorly due to continued global monetary tightening. While the outlook remains uncertain, the industry has entered a period of consolidation where companies that build solutions with real world utility will gain the upper hand and survive and thrive through the crypto winter.
Many retail and institutional participants fled to self-custody via on-chain wallets. During this period, Binance remained a large portion of the market by way of liquidity and volumes, and faced several withdrawal cascades (some accounts estimated this at >$12B). However, institutional treasuries, funds and market-makers that traditionally relied on centralized exchange liquidity, sought new venues such as prime brokers, third party custodians and other credit-underwriting parties in order to continue to trade and hold assets in a trustworthy and risk-managed manner. This shift requires exchanges to be far more transparent about their financial stability, and a sufficient reporting mechanism remains to be developed (while some exchanges provided Proof of Reserves, unfortunately those attestations often left more questions than answers due to insufficient disclosures). Market sentiment across all exchanges – whether audited or unaudited – is tied to questions of trust. As such, market participants have drastically reduced balances posted to exchanges, increased withdrawal frequency and shortened horizons for most trading strategies, all culminating in a heavy drag on liquidity coupled with volatile prices.
By the end of Q4 2022, XRP spot markets experienced a general downtrend by way of average daily volumes (ADVs) currently at roughly $700M, down from $1.1B in Q1 2022 (Source: CryptoCompare). This is consistent with crypto more broadly, where in the derivatives market, open interest for BTC was down 15% from Q3 2022 and 30% from Q4 2021 while open interest for ETH was surprisingly more resilient, down less than 10% from Q3 2022 and 25% from Q4 2021. No single centralized exchange has benefitted from this flight to self-custody which underscores just how uncertain the landscape has become. While there were some Decentralized Exchanges (DEXs) that have capitalized on this migration, volumes still remained far below their bull-market highs (down >50%)
On December 2, Ripple’s reply brief in support of its motion for summary judgment where the company asked the court to grant judgment in the company’s favor was made public. After two years of fighting this lawsuit on behalf of the entire crypto industry and American innovation, the case is fully briefed and Ripple is proud of its defense and feels more confident than ever as it awaits the Judge’s decision. Decision timing is in the Judge’s hands but the company is hopeful to see a ruling in 2023.
In 2023, stablecoin regulation will likely be top priority and, in the US, Ripple expects major bills from last term to be reintroduced (e.g., RFIA and DCEA) as Congress seeks to impose tighter controls in the wake of FTX’s demise.
Last quarter, XLS-20 went live on the XRP Ledger Mainnet. This represents a considerable milestone for developers and builders utilizing the XRPL for their native NFTs projects and apps, which can represent assets that are each unique along with operations to enumerate, transfer and hold such tokens.