Ripple
How XRP sent USDC out of the prized crypto index
Posted:
| Last updated: February 6th, 2024
Journalist
- After flipping its market cap, XRP has now gotten the recognition USDC once had.
- New addresses hold more USDC than XRP.
Ripple [XRP] has replaced Circle [USDC] as the fifth member of the coveted Hong Kong Virtual Asset Consortium (HKVAC) global large equal weight index which was released on 13 October. The HKVAC is designed to reflect the extensive spectrum of investable digital assets.
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The organization does this by assessing regulation, risk, and trust benchmarks for assets before coming up with its top five.
XRP takes over, USDC drops
Previously, USDC was in the top five alongside Bitcoin [BTC], Ethereum [ETH] Binance Coin [BNB], and Tether [USDT]. However, the wins of XRP and some losses that Circle had to take earlier in the year contributed to the replacement.
Since HKVAC considers regulation and performance as a criterion, one can conclude that Ripple’s partial win over the U.S. SEC helped XRP get on the list. Also, noteworthy was the fact that the token has a 41.50% increase on a Year-To-Date (YTD) basis.
Although USDC has been able to maintain its peg to the U.S. dollar, the stablecoin’s links to the challenges that befell some traditional institutions really affected it. In March, Circle revealed that $3.3 billion of its reserves was with the troubled Silicon Valley Bank (SVB).
As a result of the disclosure, USDC briefly fell to $0.86 but was able to regain the dollar peg moments later. However, one area that USDC has not been able to revive is its market cap. Apart from increasingly losing stablecoin dominance to USDT, XRP also flipped USDC’s market cap.
At press time, XRP’s market cap was $25.94 billion while USDC’s was lower at $25.12 billion. This data confirms how there has been more XRP in circulation than USDC for a while.
Source: Santiment
Stablecoins reign here
As per Network Growth, both USDC and XRP have experienced declines in recent times. According to Santiment, XRP’s Network Growth was 286 at the time of writing. USDC’s, on the other hand, was much higher at 2278.
Network Growth measures the number of new addresses interacting with a network. When the metric increases, it means there have been a lot of transactions involving new entrants. When the Network Growth decreases, it implies a decrease in traction.
Source: Santiment
Realistic or not, here’s USDC’s market cap in XRP terms
So, USDC’s Network Growth outpacing XRP is not necessarily a testament that the Circle network was performing better. Instead, it could be a sign that market players are tilting toward holding stablecoins as many seem to be preparing for a bull cycle.
Meanwhile, there were other cryptocurrencies listed in HKVAC’s top 30 index. After Internet Computer [ICP] went off the list, MakerDAO [MKR], and Quant [QNT] joined the fray.
