Ripple Says Crypto Traders Swapping Bitcoin (BTC) and Ethereum (ETH) for XRP to Avoid Network Congestion
Crypto

Ripple Says Crypto Traders Swapping Bitcoin (BTC) and Ethereum (ETH) for XRP to Avoid Network Congestion

Ripple says the latest on-chain analysis indicates that traders are increasingly converting Bitcoin (BTC) and Ethereum (ETH) to XRP when transferring their funds to and from crypto exchanges.

The March 12 crash and Bitcoin’s rapidly rising price in the past two months caused a sharp increase in crypto trading volume, sometimes increasing fees and slowing down transaction times for BTC and ETH, the two largest cryptocurrencies by volume. .

According to Ripple’s fundraising and development department Xpring, traders use XRP during those periods of increased network congestion to ensure they can transfer their capital as soon as possible.

Xpring says the phenomenon is especially evident on the Ethereum network.

“On days when Ethereum costs skyrocketed, XRP transactions between several hefty transactions also increased significantly (Figure 1). Overall, higher Ethereum costs correlate with higher volumes in XRP (Pearson’s R = 0.7, statistically this is a meaningfully strong positive correlation).

For example, Ethereum’s transaction costs increased by more than 400% on May 12, 2020. That same day, XRP’s cross-exchange trades rose by 226%. “

Once traders make quick and cheap transfers with XRP, they can exchange the XRP for the crypto asset of their choice. While Ripple’s analysts see strong evidence that traders are turning to XRP to transfer balances and reaping the benefits of “value-added” features, they note that correlation is not equal to causation.

Ripple, which owns more than half of the 100 billion XRP, says fees for digital assets have remained stable during the increase in market volatility and trading volume.

“Building an efficient and resilient network that makes it easy for anyone to transfer money is Ripple’s core vision. Strong evidence that these features are an added value for users gives our daily work fulfillment.”

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James Donald
James Donald writes for the Crypto section of Select News 91. He is an economic expert with a special interest in the unregulated currency system. He believes that the future of the planet lies in the unregulated system and that cryptocurrency is only beginning its journey. Whether his prediction is true or not, his skills certainly show his ability to analyze trends and dissect policy decisions. His column talks about the various cryptocurrencies failing and succeeding in a market that is nowhere near saturation.

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