A recent report by Messari has revealed that the XRP Ledger (XRPL) experienced a surge of 47% in its token market cap during the fourth quarter of 2023, reaching a total of $169 million. The report delves into the various factors that contributed to this notable growth.
One significant factor behind the surge in market capitalization was the distribution of 4 billion XRP tokens throughout 2023. This distribution accounted for 8% of the total XRP supply, contributing to the increase in market cap. However, the impact of a significant price spike on November 13 cannot be overlooked. During this spike, the XRP token reached a high of $0.7503, further boosting market capitalization.
Additionally, the XRPL employs a transaction fee-burning mechanism, which applies deflationary pressure to the total supply of 100 billion XRP. However, the relatively low transaction fees on the network resulted in a low burn rate of approximately 12 million XRP since the inception of the XRP Ledger.
The report also highlights the mixed trends in network activity during Q4 2023. While active addresses decreased by 31.3% quarter-over-quarter (QoQ), the number of transactions increased by 22.7% QoQ. Notably, a significant portion of transaction activity originated from a group of accounts sending transactions to a single account for inscription-related activity. The number of accounts on the XRPL increased by 188,000, reaching 5.00 million in Q4.
Furthermore, Q4 2023 marked a significant turning point for the XRP Ledger as it concluded a multi-year legal battle with the U.S. Securities and Exchange Commission (SEC). The court ruling in favor of XRP not being considered an investment contract or a security had a positive impact on the token’s price, leading to an increase of over 70% on July 14. The subsequent relisting of XRP on major cryptocurrency exchanges further strengthened its position.
Overall, the report highlights the growth of the XRP Ledger during Q4 2023, driven by factors such as price spikes, legal victories, and network activity. As its market capitalization continues to expand and adoption increases, XRP solidifies its position in the cryptocurrency market.