Analyst Says Stablecoins Have Crushed XRP’s Momentum

• A crypto analyst has painted a grim picture for XRP, saying that the rise of stablecoins has pushed it back to the sidelines.
• He believes Ripple will continue to grow, but has cast doubt on the token’s long-term importance.

Ripple is rapidly expanding beyond its focus on cross-border payments to a unified, regulated infrastructure for large-scale, complex markets with its mega acquisitions of GTreasury, Rail, Palisade, and Hidden Road (rebranded as Ripple Prime). Alongside these are also significant partnerships, boosting its market penetration.

The company has even successfully launched the Ripple USD (RLUSD), its own US dollar-pegged stablecoin. To date, the business has grown into a $40 billion entity, giving it the confidence to navigate the market without going public at this time.

Despite Ripple’s top executives highlighting that XRP remains central to its business model, the crypto community has repeatedly questioned the token’s future in relation to the company. Elliot Wainman, a creator and host of EllioTrades on YouTube, has recently amplified this concern.

ADVERTISEMENT## The Exponentially Rising Stablecoin Ecosystem

According to Wainman, the rise of stablecoins has considerably disrupted the market. The stablecoin sector is worth over $318 billion as of Sunday evening (UTC) with an estimated hundred tokens in circulation. However, a massive chunk of its value concentrates on Tether (USDT), Circle’s (USDC), Ethena (USDe), Dai (DAI), Paypal USD (PYUSD), World Liberty Financial USD (USD1), Global Dollar (USDG), RLUSD, and Tron DAO Reserve’s USDD (USDD).

USDT accounts for roughly $186 billion, while USDC accounts for $75 billion. The rest are somewhere between $1 billion and $6 billion. In comparison, XRP has a market capitalization of around $124 billion over the same timeframe.

Stablecoins Halting XRP’s Momentum

Wainman believes the trend has also thrown a wrench in XRP’s momentum. After all, people can easily use stablecoins as cash alternatives because of their strong peg to fiat currencies, unlike XRP and other similar cryptocurrencies, which are prone to volatility and still require conversion in and out of local currencies for transactions. This effectively kills the vibe of XRP as a payments bridge, as stablecoins have emerged as a more frictionless option with the same near-real-time transfer speeds and minuscule transaction fees.

ADVERTISEMENTMoreover, the analyst emphasized that the government, particularly central banks, and financial institutions want something they can control and monitor. Stablecoins happen to be something of a middle ground for this requirement.

XRP, amid its implied ISO 20022 and regulatory alignment, operates in a decentralized ecosystem purely driven by supply and demand dynamics. While it’s true that banks and other large industries are now adopting Ripple’s settlement system and RLUSD for payments, they are not directly adopting XRP itself.

XRP Becoming a Niche Product

For Wainman, Ripple as a company will be fine because it has billions in assets and approximately 300 partnerships. He claimed it will continue to innovate and release new products and services from time to time. The analyst had no doubt that the company would remain profitable, given its sustainable gains from fees and investments.

On the other hand, the same couldn’t be said about XRP. The host of ElliotTrades opined that the token has devolved into niche applications, with its vision of becoming a “global bridge” crushed by stablecoins.

Disclaimer: The analysis and commentary featured in this article are only for informational purposes. They do not constitute financial advice or a product recommendation from the author or the Blockzeit team.

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