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The number of Ripple (XRP) transactions on the XRPL network dropped by 65% from 2.5 million on March 19 to less than 900,000 on May 14, 2023.
Failed XRP transactions
As of May 14, 2023, 852,000 transactions have been processed by XRPL, a decentralized blockchain network from Ripple Labs designed to transfer value quickly. This is 65% less than the peak on March 19, when the total number of XRPL transactions exceeded 2.5 million.
Notably, during this period, there was no major technical reason, such as a blockchain or node vulnerability in XRPL, to explain the drop in transactions.
However, it is clear that in the last two months from March to May 2023, the cryptocurrency market was under pressure. This could have contributed to a decrease in the number of transactions on the network.
On March 29, the price of XRP peaked around $0.58. This comes 10 days after XRP transactions surged to its highest level on March 19th. However, since the second half of March, the number of transactions and XRP prices have been falling.
XRP prices are down 27% to $0.42 at the time of writing in mid-May, compared to $0.58 registered on March 29. However, it remains unclear whether XRP prices will continue to decline, reflecting the number of XRPL transactions.
In general, the number of transactions on the network can directly affect transaction fees and prices. Moreover, it can give an idea of the level of demand for the cryptocurrency and the blockchain network. The greater the demand for the underlying network token, the higher the trading volumes, and this growth can affect prices.
In XRPL, users pay fees using XRP. Therefore, the higher the demand for XRP in transaction settlement, the stronger the upward pressure on the native currency will be.
The decrease in the number of XRP transactions is due to lower prices. However, it should be noted that the drop in XRP prices was not an isolated event. Like the prices of other cryptocurrencies, XRP and top coins, including BTC and ETH, are pulling back from recent peaks recorded in March and April 2023.
For example, after jumping to $31,000, BTC prices have since dropped to $25,800 on May 12.
Meanwhile, XRP is currently trading at $0.41 compared to $0.58 posted at the end of March 2023.
Ripple Price May 15 | Source: XRPUSDT on Binance, TradingView
The drop in XRP transactions could also be due to market sentiment as the community keeps an eye on the ongoing SEC-Ripple case that could end this year.
The U.S. Securities and Exchange Commission (SEC) sued Ripple executives in December 2020 for conducting an illegal initial coin offering and using XRP to raise funds in violation of federal security laws. In its assessment, the regulator says that XRP is an unregistered security.
Depending on the judge’s decision next month, the outcome of the case could not only affect XRP and XRPL activity, but also how regulators perceive cryptocurrency in the United States.