Recently, XRP funding rates flipped into the negative across many derivatives exchanges, attracting the attention of the cryptocurrency community. Funding rates are periodic payments exchanged between traders in perpetual futures contracts to keep the contract’s price in line with the underlying asset’s spot price.

Hence, the negative funding rates suggest more open short positions in XRP than long positions, reflecting increased bearish sentiment.

Understanding XRP Funding Rates

The funding rate is one of the most meaningful metrics in this crypto market. In general, it signals that markets are bullish when traders holding long positions pay the premium to sellers.

Conversely, negative funding rates imply the dominance of short positions over longs, indicating bearish momentum. While these funding rates have reverted to positive on some platforms, others are still negative, signaling mixed sentiment and confirming the dynamic nature of the market.

XRP Funding Rates and XRP’s Price

Even though the XRP funding rates flipped negative within the last day, XRP’s price soared after Donald Trump’s announcement as the next president of the United States. The crypto asset’s price surged further when SEC Chair Gary Gensler announced that he would resign from his position on Trump’s inauguration day.

Negative funding rates suggest selling pressure on a crypto’s price but also create more opportunities for investors to catch market bounces. Typically, this would encourage spot traders to “buy the dip,” leading to more net outflows from exchanges. These outflows usually indicate increased buying interest.

Indeed, there have been outflows on Binance, OKX, and Kraken in the last 24 hours. According to on-chain data, XRP’s open interest is still high despite the decline in funding rate.

Despite the high open interest and swinging funding rates, traders remain optimistic. Hence, they are paying close attention to these metrics and how they influence XRP’s price. XRP trades at $2.31, up 0.3% in the last twenty-four hours.

RLUSD Gains Considerable Ground

Meanwhile, Ripple President Monica Long revealed the firm’s plans to extend the availability of the RLUSD stablecoin on major exchanges in 2025, with Bitstamp the next crypto exchange to list the cryptocurrency.

Long added that the company would continue to develop policies and partnerships to spread the availability of this stablecoin in many other markets. The Ripple executive also predicts that an XRP ETF approval and launch could follow the launches of BTC and ETH ETFs.

Meanwhile, SBI CEO Yoshitaka Kitao has predicted that all Japanese banks will be on Ripple’s ledger by 2025 as they have incorporated the firm’s interprotocol ledger (ILP) into their systems. This would make cross-border payments easier as it eliminates multiple currency conversions.

This would further consolidate Ripple as one of the leading financial tech firms worldwide.

Ripple’s Actions and XRP’s Price

Industry analysts believe XRP has enormous growth potential, driven by the increasing adoption of Ripple’s technologies and institutional interest in XRP. The New York State Department of Financial Services’ approval of Ripple’s RLUSD is a milestone that will boost the broader adoption of XRP and the RLUSD.

Jack McDonald, Senior Vice President of Stablecoins at Ripple, stated that strong institutional support and compliance frameworks are essential for any stablecoin issuer to succeed. He further said that only projects with adequate support (technical and otherwise) will prevail in a highly competitive market.

He also noted that top exchanges and liquidity providers increasingly prefer trusted, liquid stablecoins. This action reinforces the market leaders’ positions and creates difficulties for smaller issuers.

XRP’s Role in the Cryptocurrency Ecosystem

Despite being relatively new in the digital asset space, XRP adoption has grown fast. It has filled a gap in the cryptocurrency ecosystem, serving as a bridge between traditional financial systems and new blockchain technologies.

The unique use case it fills as a remittance-focused token makes it an integral part of Ripple’s broader vision for the future of finance.