XRP’s price is always a cause for speculation in the community. However, a recent analysis by a community figure has taken the discussion to a new level. Mason Versluis (@MasonVersluis) shared the XRP liquidity cheat sheet, showing XRP’s price depending on the cross-border payment volume it would need to handle daily.
XRP’s Role in Streamlining Cross-Border Transactions
XRP’s core function lies in facilitating international payments. Ripple’s On-demand Liquidity (ODL) product leverages XRP outside the U.S. to offer faster and more cost-effective settlements compared to traditional methods. This functionality has garnered significant attention from financial institutions.
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For instance, Grayscale highlighted XRP as a viable alternative to SWIFT, the dominant system for cross-border payments, in a November 2023 report. Similarly, a December 2023 report by JPMorgan recognized XRP’s potential to unlock a substantial portion of the estimated $120 billion trapped in inefficiencies within the cross-border payment system.
Notably, even the Chair of the US Securities and Exchange Commission (SEC), Gary Gensler, has previously expressed his view that XRP offers advantages over traditional fiat currencies for international transactions, and major institutions like the IMF, the World Bank, and more have recognized XRP’s potential in various reports.
Potential for Growth in the Cross-Border Payment Market
This recognition of XRP’s utility has fueled investor optimism about its potential for significant price appreciation, particularly considering the projected growth of the cross-border payment sector. Financial experts believe that if XRP captures even a fraction of this projected growth, its price would likely rise considerably from its current position.
Can XRP Reach $1,000?
According to Versluis’ XRP liquidity cheat sheet, XRP prices ranging from $100 to $500 could potentially support daily payment volumes of up to $1 trillion. However, these price points become less realistic for volumes exceeding $6 trillion to $20 trillion.
This is because XRP’s current circulating supply of approximately 55 billion tokens would be insufficient to handle the vast number of XRP needed to settle such high volumes.
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Financial expert Shannon Thorpe previously argued that a price of $500 would undervalue XRP if it were to capture a significant portion of the projected $250 trillion cross-border payment volume predicted by the Bank of England.
Versluis’ analysis suggests that for XRP to efficiently manage daily volumes between $1 trillion and $20 trillion, its price would need to reach at least $1,000. At this price point, only 1 billion XRP tokens would be required to settle a $1 trillion daily volume and 20 billion tokens for a $20 trillion volume.
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