An intriguing prediction has recently emerged, suggesting that the price of XRP could skyrocket to an astonishing $1,000. This projection takes into account a daily cross-border payment volume of $1 trillion, highlighting the utility of XRP in facilitating such transactions. Ripple’s On-Demand Liquidity product, now known as Ripple Payments, has played a significant role in enhancing the cryptocurrency’s appeal to market participants.
The usefulness of XRP in cross-border payments has not gone unnoticed by various payment entities. In a report published last December, JPMorgan recognized Ripple and XRP as potential solutions to unlock the $120 billion trapped in cross-border payments. Additionally, Grayscale, in a report from November 2023, identified XRP as a viable alternative to SWIFT for cross-border settlements. The American Institute of Physics, the IMF, and the World Bank have also acknowledged XRP’s utility in cross-border payments in their respective reports. Even SEC Chair Gary Gensler has previously acknowledged the advantages of XRP for cross-border payments compared to traditional fiat currencies.
Given the widespread recognition of XRP’s utility, investors believe that the cryptocurrency is currently undervalued. They anticipate a significant price surge, particularly due to the growth expected in the cross-border payment sector. Ripple’s 2023 New Value Report, citing the Bank of England, predicts a potential volume of $250 trillion in the cross-border payment sector over the next three years. If XRP captures even a fraction of this volume, experts argue that its price would need to surpass its current value of less than $1. Mason Versus, a prominent figure in the XRP community and the founder of Gold Squad, presented a sheet last August outlining hypothetical price requirements for different cross-border payment volumes.
Recently, market analyst EGRAG drew attention to this document, lending credibility to its content. The analysis in the sheet evaluates the necessary price of XRP to accommodate various daily cross-border payment volumes. While XRP could handle daily payment volumes ranging from $1 trillion to $500 at prices within that range, it becomes less feasible at volumes from $6 trillion to $20 trillion. This is because the circulating supply of XRP, which currently stands at 55 billion tokens, would not be sufficient to handle the required number of tokens for these volumes.
It is worth noting that finance pundit Shannon Thorpe previously argued that XRP would be undervalued at $500 if it were to capture a portion of the projected $250 trillion cross-border payment volume. Versluis’ sheet suggests that for XRP to adequately address daily payment volumes ranging from $1 trillion to $20 trillion, its price would need to reach at least $1,000. This means that if XRP were to achieve a $1,000 price, the market would need to move 1 billion XRP tokens for a $1 trillion volume and 20 billion tokens for a $20 trillion volume.
To reach a price of $1,000, XRP would need to experience a staggering increase of 188,543% from its current value of $0.5301. With such a price surge, XRP’s market capitalization would reach an unimaginable $55 trillion, leading some industry commentators to express doubts about the feasibility of such a scenario.
Furthermore, skeptics have pointed out that achieving a daily cross-border volume of $1 trillion is a challenging task for XRP in the next decade and beyond. To provide context, the global cross-border volume in 2022 was $150 trillion, averaging $410 billion per day. A $1 trillion volume would be more than double this figure.
It is important to note that the information provided in this article is for informational purposes only and should not be considered financial advice. The views expressed here are solely the author’s opinions and do not reflect the opinion of The Crypto Basic. Readers are advised to conduct thorough research before making any investment decisions, and The Crypto Basic cannot be held responsible for any financial losses incurred.