Ripple’s Q1 report has sparked a wave of speculation among analysts, who are making bold predictions about the future of XRP. One particular analyst believes that Ripple’s upcoming stablecoin will soon dominate the USDT market, as Tether continues to face regulatory challenges.
In its recent market report for the first quarter, Ripple highlighted significant milestones achieved by the company and XRP during the first three months of the year. The report, as noted by Crypto News Flash, was positive and showcased increases in trading volume and the introduction of new features for the XRP Ledger (XRPL). Since the report’s release, analysts have been dissecting its contents and sharing their insights on what it means for Ripple and the XRP community.
According to one analyst, a key takeaway from the report is that Ripple is diversifying its revenue streams away from relying solely on XRP. The company currently sells a portion of its token holdings every quarter to support the development of the XRPL ecosystem and its operations, including partnerships with payment market participants. Some critics argue that this sales model puts unnecessary pressure on the token’s market, but Ripple has dismissed these allegations.
However, the analyst known as Bearable Bull, who boasts a sizable following of over 300,000 on X, suggests that the shift away from token sales could be part of a settlement agreement with the Securities and Exchange Commission (SEC) in the ongoing lawsuit. The SEC has been targeting the token sale model since filing the lawsuit several years ago.
The upcoming stablecoin is expected to play a crucial role in Ripple’s future business strategy, according to the analyst. As previously reported by Crypto News Flash, Ripple plans to launch its stablecoin later this year. With its market connections and regulatory clarity, especially following the conclusion of the SEC lawsuit, Ripple believes it is well-positioned to handle such a token.
The stablecoin will be particularly significant if Ripple wants to reduce its reliance on XRP sales as its primary source of income. Tether, for example, generated $2.85 billion in the last quarter of 2020 from US Treasury bond interests and the appreciation of gold and BTC held in its reserves.
Tether currently dominates the stablecoin market with its USDT stablecoin, which boasts a market capitalization of $111 billion. Its closest competitors, USDC and DAI, trail behind. However, Tether has faced regulatory scrutiny for its questionable practices and has settled with authorities on multiple occasions.
Nevertheless, before challenging Tether’s market dominance, Ripple must first address the SEC’s claim that its stablecoin constitutes an unregistered security offering, as reported by Crypto News Flash.
Additionally, the analyst predicts that custody solutions will become another revenue stream for Ripple. Last year, the company acquired Metaco, a Swiss-based crypto custody firm, for $250 million. This acquisition could position Ripple as a major player in the crypto custody market.
In conclusion, Ripple’s Q1 report has provided valuable insights into the company’s future plans. With the upcoming stablecoin and potential expansion into the custody market, Ripple is poised to make significant strides in the cryptocurrency industry.