Japanese cryptocurrency investors are known for their passionate support of XRP. In fact, at one point in Japan, XRP was more popular than Bitcoin. However, official data from the Japan Virtual and Crypto Assets Exchange Association, or JVCEA, the Financial Services Agency-approved self-regulatory organization, or FSA, shows that XRP is losing its appeal in Japan.
We have already seen the reduction of the “XRP army” in the English-speaking region. As XRP’s price stagnation continues, the same thing is happening in the Japanese market.
On June 20, Yuya Hasegawa, a market analyst at FSA-licensed cryptocurrency exchange BitBank, analyzed whether XRP will ever claim the throne.
The dominance of the XRP market has shrunk significantly
The number of XRPs held in Japanese yen decreased significantly over the course of a year.
User cryptocurrency holdings dominance monthly chart (in JPY). Source: BitBank, JVCEA
As of December 2018, monthly XRP dominance was 51.36% while Bitcoin was 34.5%. In the latest data available from February 2020, XRP dominance was 27.54% while Bitcoin at 51.74%.
Lack of narrative
Hasegawa explains that one of the reasons Bitcoin overtook XRP could be the price disparity. Since January 2019, the price of Bitcoin has risen by 152.79% while XRP has only gained 16.81%.
Yet this may only be part of the story. Hasegawa also suggests that XRP lacks meaningful narrative in the region:
“The cryptocurrency market rally in 2019 was fueled in part by the ‘safe haven’ narrative associated with bitcoin, and the January 2020 rally was also due to a hedge against geopolitical risk and expectations of multiple planned halves in spring (again, strongly correlated with bitcoin). Ethereum also had a high monthly trading value, but historically has a high correlation with bitcoin and is expected to undergo a major network update, Serenity, during the third quarter of this year. Therefore, in a sense, the popular narratives that have been pushing the market over the past year or so haven’t exactly shed any light on Ripple’s XRP. ”
Can XRP claim the throne again?
Hasegawa believes that XRP will continue to struggle in the short term, noting that “the market’s attention will likely be kept hooked on bitcoin and Ethereum, due to the current global economic and financial situation, and the Serenity update coming in the third quarter. “. In the longer term, demand for XRP is expected to return with the onset of the “new normal” of the COVID-19 era “:
“Because cross-border movements are strictly limited, the demand for cross-border payments and remittances has the opportunity to grow. XRP’s issuer, Ripple, already has a scalable infrastructure to implement quick and cheap cross-border remittances, and its cases of ‘use are silent growing in some parts of the world ”
Cointelegraph recently reported that Ripple, the largest holder of XRP, has started the Open Payments Coalition and launched a universal payment system called PayID.