Crypto - XRP outperforms BNB, Solana, and Cardano in terms of liquidity

Kaiko, a leader in crypto analysis, has released its quarterly liquidity ranking of major cryptos. The study, conducted in the fourth quarter of 2023, places XRP ahead of competitors like BNB, Solana, and Cardano, even though they have a higher market capitalization. The analysis emphasizes the importance of evaluating actual liquidity, beyond mere market capitalization.

XRP solidifies its position as leader behind Bitcoin and Ethereum

In Kaiko’s ranking, cryptos are rated according to criteria such as market depth, the number of exchanges offering the asset, and trading volumes. On this basis, XRP retains the third position it achieved in the previous quarter, just behind the two giants Bitcoin and Ethereum but ahead of Dogecoin.

This placement confirms the strong liquidity of XRP, thanks to its historical anchorage in the crypto market. By comparison, assets like BNB and Cardano only rank 13th and 10th respectively, even though they surpass XRP in terms of market capitalization.

This significant gap demonstrates that theoretical market capitalization does not accurately reflect the concrete interest of investors in an asset, unlike real liquidity indicators such as those analyzed by Kaiko.

Breakthrough of Solana thanks to the hype of the fourth quarter

The other big winner of the crypto ranking this quarter is the Solana (SOL) network, which leaped to fifth place from the eleventh previously. SOL thus overtakes Litecoin, which was previously fifth.

This spectacular rise is due to the massive buzz that Solana benefited from between October and December 2023. During this period, the SOL price literally exploded, moving from 23 dollars to more than 120 dollars.

This sudden craze for SOL resulted in a massive increase in crypto trading volumes and available market depth. This boom in activity mechanically boosted the liquidity measured by Kaiko for the quarter.

The hype around NFTs and decentralized projects on Solana attracted many investors, both novices and institutional. This sudden influx of capital inflated volumes and fueled speculation that quadrupled the price of SOL in just a few months.

This quarterly study by Kaiko highlights the possible discrepancies between market capitalization and liquidity of a cryptocurrency. Some trendy projects exhibit relatively low liquidity while older assets like XRP excel in this respect. Analyzing liquidity indicators gives a more accurate picture of the real adoption of a crypto than market capitalization alone.