Trading in virtual currency has started making a shift from being speculative assets last year as giants like Fidelity, TD Ameritrade, and JP Morgan enters the space, said Breanne Madigan, Head of Global Institutional Markets at Ripple.

And the more the participants enter, especially traditional institutional players, in liquidity provisions the more aggressive the market, she said.

New institutional entrants like futures and derivatives according to her has been playing a big role in bringing investors into space and further stabilizing markets. She said,

“Continued growth in derivatives will open up access to more efficient capital and drive higher trading volumes throughout 2020 and beyond.”

Perpetual swaps are another most liquid and massively traded instruments. Just this month, Binance added XRP to its Futures trading platform.

Another sector with growth potential is the borrowing and lending market which she says is fueled by low-interest rates for fiat currencies, a boost in the amount of digital asset market participants, and increase of long-term digital asset holders looking to make yield.

However, digital asset value remains relatively low during this period. Madigan says the markets appear to be still undergoing a period where real-world utility and adoption are catching up. Madigan said,

“As institutional-grade infrastructure continues to be built, and real-world problems are increasingly solved using digital assets like XRP, the tipping point to critical-mass adoption is constantly moving closer.”

She further explained that it’s RippleNet that is pumping the use of XRP. RippleNet is making it possible for financial institutions to connect and further their extended networks creating a ‘network of network’ effects. She said,

“As these network effects continue to increase, it will drive even more liquid markets and robust financial products around crypto, bringing new entrants into the ecosystem.”

In 2019, blockchain adoption became widespread with increased awareness of benefits such as cross-border payments. Even Steve Mnuchin, Secretary of the Treasury, said at the 2020 World Economic Forum,

“There are benefits to cross-border payment systems in lowering costs for consumers and businesses. We absolutely support companies working on this.”

Together, the expanded utility of virtual currency in cross border payments and opening of derivatives trading contributes to a greater liquid and stable market for digital assets than ever before with no sign of slowing down, Madigan said.

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