A newly surfaced document has projected a bold increase in the price of XRP, suggesting it could reach $1,000. This projection takes into account a daily cross-border payment volume of $1 trillion. XRP’s usefulness in cross-border payments, particularly through Ripple’s On-Demand Liquidity product (now Ripple Payments), has contributed to the optimistic outlook surrounding the cryptocurrency among market participants.
The utility of XRP in cross-border payments has caught the attention of various payment entities over the years. In December of last year, a JPMorgan report mentioned Ripple and XRP as potential solutions to unlock the $120 billion trapped in cross-border payments. In addition, Grayscale highlighted XRP as a possible alternative to SWIFT in cross-border settlements. The American Institute of Physics, the IMF, and the World Bank have also recognized XRP’s usefulness in cross-border payments in their reports. Even SEC Chair Gary Gensler has acknowledged the advantages of XRP over traditional fiat currencies for cross-border payments.
With the recognition of its utility by the general public, investors believe that XRP is significantly undervalued and anticipate a price explosion, especially with the growth of the cross-border payment sector. Ripple’s 2023 New Value Report, citing the Bank of England, suggests that the cross-border payment sector could see a volume of $250 trillion in the next three years. If this projection materializes, experts argue that XRP would need to surpass its current price of below $1 in order to accommodate even a fraction of this volume. Mason Versus, a prominent figure in the XRP community, presented a sheet last August outlining hypothetical price requirements for different cross-border payment volumes.
Market analyst EGRAG recently drew attention to this document, lending credibility to its contents. The analysis in the sheet evaluates the price that XRP would need to reach in order to handle different daily cross-border payment volumes. At prices ranging from $100 to $500, XRP could adequately handle daily payment volumes of $1 trillion, but becomes less feasible at volumes of $6 trillion to $20 trillion. This is due to XRP’s circulating supply of 55 billion tokens, which would not be sufficient to handle the amount needed for these volumes.
Versluis’ sheet suggests that XRP would only be able to handle daily payment volumes ranging from $1 trillion to $20 trillion if its price reaches at least $1,000. In order to accommodate a $1 trillion volume, the market would need to move 1 billion XRP tokens, and for a $20 trillion volume, 20 billion tokens would be required. Achieving a $1,000 price for XRP would require a massive increase of 188,543% from its current value of $0.5301. However, some industry commentators have expressed doubts about the feasibility of such a high price, as it could potentially push XRP’s market cap to an unimaginable $55 trillion.
Furthermore, some have pointed out that achieving a daily cross-border volume of $1 trillion is a challenging task for XRP over the next decade and beyond. In 2022, the global cross-border volume reached $150 trillion, with an average daily volume of $410 billion. A $1 trillion volume would be more than double this figure.
It is important to note that this content is for informational purposes only and should not be considered financial advice. The views expressed in this article are the author’s personal opinions and do not reflect those of The Crypto Basic. Readers are advised to conduct thorough research before making any investment decisions. The Crypto Basic is not responsible for any financial losses.