Does XRP offer investors long-term value?

The price of XRP has not been as volatile as other coins. The overall market has skyrocketed in the past few days, but not only has this token not risen, it is also trading at a lower price. While the top 3 coins (BTC, ETH, and BNB) are up around 10% in the weekly timeframe, XRP is down more than 6%.

XRP Price Chart 4 Hours | Source: Tradingview

The state of the XRP on-chain indicators makes things all the more worrying for short-term participants. The MVRV rate has not been able to remain positive for a long time. The ratio of market value to real value (MVRV) is used to assess the fair status of a token.

If this ratio is positive, it means that the asset is overvalued. Conversely, a negative value means that the token is undervalued and investors are losing more value than is usual in the market.

For example, on October 1, the rate was 5%, but by the second day it was down to 0.08%. After that, it tried to recover to around 3% a few times but could not maintain this for long.

On 10/10 the MVRV reflects a value of -3.4% and has just left negative territory at the time of writing. Hence, the indecision shown by MVRV proves that investors have lost money that they deserved. In short, it wasn’t long before investor returns were “in color”.

MVRV rate | The source: mood

On the other hand, the inactive circulation has increased twice. The following graph shows the number of individual tokens that were moved after 90 days of inactivity. Over 1 billion XRP were broadcast on October 1st and another 720 million on October 15th.

Inactive traffic (90 days) | The source: mood

An increase in the number of immovable coins often underscores a broader accumulation trend. Since such tokens have been postponed so far, it is safe to say that participants are starting to sell, and rightly so, given that XRP returns are quite unattractive in the short term.

According to data from Messari, XRP has only increased 6% over a monthly period. Meanwhile, Bitcoin is 30% higher, ETH and BNB more than 15%.

Will something change in the long run?

A common prediction is that the trend will change forever over the long term. That statement doesn’t seem to make sense in relation to XRP.

Ripple Labs does not offer a completely “one-of-a-kind” service. The company is creating an open source payment system and faces some strong competitors both inside and outside the crypto space. Many commented that Ripple was struggling to keep up with them.

For example, a recent post in Bitcoin Magazine described how COTI has kept up with XRP over time. A fintech platform that enables users to build their own payment solutions, COTI has entered a multitude of avenues such as cross-border transfers – Ripple’s strength today.

Outside of the cryptosphere, SWIFT has the upper hand in such cross-border transactions. More than 11,000 financial institutions in over 200 countries use their services. Ripple, on the other hand, only has about a third of these institutions spread across 45 countries.

Even more violently, SWIFT launched a new service called SWIFT Go a few months ago to compete with Ripple for faster transactions.

As a result, Ripple may not be the ideal protocol for cross-border payments in the near future as other platforms grow in the same playing field. If so, XRP will slide and its price will suffer the most. Given the ever-evolving landscape, even investors are not guaranteed anything at this point in time.

However, the advantage that Ripple and XRP have created over the years could potentially save the protocol if such a situation actually occurs.

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Minh Anh

According to AMBCrypto

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