Ripple’s Big Score: The Major Reason XRP Price Could Start Rallying Again | Bitcoinist.com

Trusted Editorial content, reviewed by leading industry experts and seasoned editors. Ad Disclosure Following the launch of Ripple’s US dollar-pegged stablecoin, RLUSD, many in the crypto space believed that it could negatively impact the XRP price or replace the altcoin. However, new reports from a crypto analyst suggest that RLUSD and XRP actually work together to support each other. He also indicated that the stablecoin could be a major reason XRP could rally again

Ripple’s RLUSD To Become Catalyst For An XRP Price Rally

The introduction of RLUSD in 2024 saw mixed reactions from many in the XRP community. While XRP presents a more volatile and speculative digital asset, RLUSD brings stability and reliability. Market analyst Xaif Crypto has explained how this stability, as well as other functions of the Ripple stablecoin, can benefit XRP

Related Reading: Ripple’s Last Piece Of The Puzzle: How Insitutions Will Deploy Liquidity To XRP LedgerIn his post on X, the analyst noted that RLUSD creates a powerful demand engine that could eventually support a price rally for XRP. He shared an image outlining several ways this could happen. According to Xaif Crypto, as a stable asset, RLUSD eliminates transactional volatility, making it easier for investors to purchase XRP in large amounts. He explained that, rather than regulated banks or institutions relying on fiat to buy XRP, they could use RLUSD, thereby making it a preferred trading and settlement medium for XRP

Xaif Crypto also explained how RLUSD could fuel significant price movements in XRP by “clearing the order book.” He noted that banks and financial institutions could use the high-liquidity stablecoin to place large buy orders for XRP on crypto exchanges. As these orders are filled, cheaper XRP sell orders are quickly purchased, depleting liquidity and supply at lower price levels. Once these sell orders are gone, buyers must pay higher prices, potentially fueling an XRP rally as institutional demand grows

Furthermore, Xaif Crypto highlighted a “feedback loop” that could support a sustained price growth for XRP. He noted that RLUSD enables large transactions to occur faster and more efficiently than traditional fiat trading pairs such as USD/XRP. As the XRP price rises, institutions may continue using the cryptocurrency due to its speed and cost advantages for payments and settlements, creating ongoing demand that could further reinforce upward price movement

How This Theory Works In Reality

Xaif Crypto has outlined a real-world scenario, showing how RLUSD could fuel an XRP price rally. In the example, a bank deposits $1 billion into RLUSD, which is held in a Ripple-supported wallet or exchange and is ready for use. The bank then uses the RLUSD to buy XRP on an exchange

Related Reading: Ripple’s RLUSD Is Not A Threat To XRP’s Future, Here’s WhyThe XRP order book is assumed to be:

• 100,000 XRP at $0.50
• 50,000 XRP at $1.00
• 20,000 XRP at $5

The bank’s $1 billion purchase then clears the order books in stages:

• Buys all the $0.50 orders
• Buys all the $1.00 orders
• Starts buying into the $5.00 range

Following the large-scale RLUSD purchase, XRP’s price jumps sharply to $5 or higher, establishing a new baseline as cheaper sell orders are depleted. The analyst notes that this effect may persist as banks adopt XRP for fast, low-cost international payments. Meanwhile, RLUSD acts as a stable bridge, making the process efficient and repeatable, potentially creating ongoing demand and sustained upward pressure on XRP’s price

XRP trading at $1.40 on the 1D chart | Source: XRPUSDT on Tradingview.comFeatured image from Adobe Stock, chart from Tradingview.com Editorial Process for bitcoinist is centered on delivering thoroughly researched, accurate, and unbiased content. We uphold strict sourcing standards, and each page undergoes diligent review by our team of top technology experts and seasoned editors. This process ensures the integrity, relevance, and value of our content for our readers.