XRP’s price dropped sharply from $2.59 to $2.31 within 24 hours, bringing its market cap down by 12% to $131.42 billion. This decline pushed XRP out of its spot as the third-largest cryptocurrency, falling behind Tether (USDT). Futures trading volume also plummeted from $32 billion to $16 billion, signaling reduced market activity.
The decline is largely tied to increased selling pressure and market speculation, potentially influenced by the delay in Ripple’s RLUSD token launch. With this fluctuation, the community is in doubt that RLUSD may impact XRP which is initially planned to operate on Ripple’s XRP Ledger (XRPL). But analysts refuse such claims here’s what it means for you!
RLUSD and XRP: A Partnership, Not a Rivalry
Vincent Van Code, a key community voice, cleared up confusion about Ripple’s RLUSD token, emphasizing it won’t replace XRP but instead enhances the XRP Ledger (XRPL). XRP remains at the core of XRPL, streamlining cross-border transactions and solving inefficiencies in traditional forex systems by directly pairing various currencies with XRP like AUD/XRP or USD/XRP, saving costs and improving efficiency.
A standout feature of XRPL is its auto-bridging capability, which simplifies currency conversions. For instance, sending RLUSD to someone in RLYEN is seamless, thanks to XRPL’s decentralized exchange (DEX) and automated market maker (AMM) pools. These pools stabilize prices and ensure smooth operations, even during market volatility. XRP continues to power the system as its indispensable backbone.
Ripple’s Strategy
Ripple’s CTO, David Schwartz, highlights that XRP is vital to the XRPL because it is decentralized and doesn’t rely on a middleman. While RLUSD adds new features to the system, it works alongside XRP rather than replacing it. Experts believe RLUSD’s launch might help increase XRP’s value over time, with predictions ranging from small gains to a potential high of $10 in a year.
According to Ripple Labs CEO Brad Garlinghouse RLUSD will largely target the big institutional players. He even added that, once RLUSD is available, it will use both RLUSD and XRP in its cross-border payments solution making the experience more enhanced for the users.
Though it is still not clear if RLUSD is a threat to XRP or not, XRP’s sudden rise towards the end of the year made it clear that XRP has all the possibility to rise, and RLUSD launch can only be a bonus to this bullish momentum.
