Ripple (XRP) Could See a Liquidity Push With New Perpetual Swaps
BitMEX and Binance, two of the largest cryptocurrency trading platforms, have both added XRP/USD perpetual swap products. This could entail an increase in XRP liquidity via derivatives. Spot markets for XRP are already highly liquid thanks to GSR, the market maker hired by Ripple Inc, February 4, 2020.
More XRP Trading Avenues
Speculators of XRP will be delighted by the recent listing of XRP/USD perpetual swap instruments on BitMEX’s platform. As the single largest derivative trading venue for cryptocurrency, the introduction of a USD denominated derivative gives XRP traders a new, liquid path to trading.
Binance also announced the same earlier this year, and the two platforms together make up a lion’s share of the derivatives market.
XRP is up nearly 33 percent against the dollar since the start of 2020. The addition of liquid trading venues aids the price discovery process, which has historically been suppressed by Ripple thanks to their intermittent escrow dumps. The company has significantly reduced the amount of XRP they sell in the open market, which has imprinted a positive impact on XRP price.
Moreover, the addition of an XRP/USD derivative on BitMEX, which only offers USD base pairs for Bitcoin (BTC) and Ethereum (ETH) implies that these exchanges are certain of XRP’s longevity.
Ripple Makes Strides
The Q4 2019 annual report from Ripple marks another reduction in escrow sales of XRP. Given the amount of public scrutiny they have come under, as well as the class-action lawsuit, they are likely to consistently keep XRP sales low.
As previously reported by BTCManager, Ripple’s CEO, Brad Garlinghouse, hinted at a potential IPO from the cryptocurrency giant. Garlinghouse didn’t offer an exact timeline, but he believes Ripple “will be on the leading side” of what he believes to be an influx of cryptocurrency and blockchain companies going public.
Ripple has been criticized widely for the way they do business, but it cannot be denied that they have made long strides in the past few years. This is evidenced by their constant partnerships with large institutions to use Ripple’s technology.
The use of blockchain for payments reduces costs and improves efficiency. For institutions, non-custodial services don’t work; they need someone on the other side to take accountability. Ripple is doing just that, by bringing blockchain-based payments to the banking system without forcing them to do everything themselves.