Pundit Explains Why The XRP Price Hitting $100 Isn’t Delusional

Overview

The discussion surrounding the potential for XRP to reach a price of $100 is often met with skepticism, primarily due to concerns about market capitalization and circulating supply. Despite these concerns, some advocates believe that traditional market cap calculations do not accurately reflect the unique role of XRP in the cryptocurrency ecosystem.

The Debate on XRP’s Valuation

Critics of the idea that XRP could reach a price of $100 argue that such a valuation would imply a market cap of at least $6 trillion. This figure is viewed as unrealistic when compared to the current state of the cryptocurrency market. However, some XRP supporters, including a crypto pundit known as 24HRSCRYPTO, contend that the traditional approach to market cap fails to account for the actual utility of XRP.

According to 24HRSCRYPTO, XRP is not merely a static store-of-value asset but is designed for high-velocity settlement. This perspective challenges the conventional wisdom that market capitalization serves as a reliable metric for assessing the value of such cryptocurrencies. The pundit emphasizes that market cap calculations are misleading when applied to assets like XRP, which are intended to facilitate the rapid movement of capital across various systems and borders.

The reasoning behind this argument is that XRP is meant to free trapped capital and enable swift transaction settlements. As a result, the same units of liquidity can be reused multiple times within short timeframes, driven by high demand. Therefore, the price of XRP reflects not just demand but also the level of trust in the system and the volume of economic activity it facilitates. In this light, traditional market cap comparisons may not be suitable for determining the potential value of XRP in a fully operational global settlement role.

24HRSCRYPTO firmly believes that viewing XRP at a price of $100 is not delusional but rather a realistic expectation under this framework. This assertion challenges the prevailing skepticism that arises from straightforward market cap math.

The Market Cap Math Dilemma

The skepticism surrounding a $100 XRP price can be traced back to basic market cap calculations. At the time of this discussion, XRP is trading significantly lower than $100, and reaching that price point would require an enormous market cap—one that exceeds the total market cap of the entire cryptocurrency market.

Currently, XRP has a circulating supply of 60.85 billion tokens, and the multiplication of this supply by a $100 price would yield a staggering $6 trillion market cap. This figure is often treated as a ceiling for the asset’s potential valuation. Critics argue that for XRP to achieve a price of $100, trillions of dollars would need to be allocated within its market cap simultaneously.

However, proponents like 24HRSCRYPTO argue that this logic primarily applies to cryptocurrencies designed to serve as stores of value, such as Bitcoin. They contend that this reasoning does not hold when applied to an asset focused on providing liquidity, like XRP. Nevertheless, it is important to note that this assertion does not guarantee that XRP can attain a $100 price without the market cap of its circulating tokens reflecting such a valuation.

From author

The discussion around XRP’s potential valuation raises important questions about how cryptocurrencies should be assessed. The traditional metrics commonly used in financial markets may not adequately capture the unique characteristics of cryptocurrencies designed for specific functions, such as liquidity provision. As the debate continues, it becomes clear that the valuation of digital assets like XRP may require a paradigm shift in how we understand their utility and potential market dynamics.

Impact on the crypto market

• The debate over XRP’s valuation could influence investor sentiment and trading strategies within the cryptocurrency market.
• If XRP gains acceptance as a liquidity-focused asset, it may prompt a reevaluation of how other cryptocurrencies are valued.
• The discussion highlights the need for more sophisticated metrics that capture the unique properties of different cryptocurrencies.
• Increased interest in XRP could lead to greater market activity, impacting liquidity and trading volumes.
• The ongoing dialogue may stimulate further research and analysis on the role of market cap in cryptocurrency valuation.