Why XRP Will Hit $7 This Cycle

This legacy crypto is far from over.  

Unlike most other crypto assets in this space, XRP has failed to return to its ATH—let alone get anywhere near it—during the first market-wide bull run we experienced between October 2017 and January 2018.

2,382 days, to be exact.

This piece will cover why XRP can smash through its current peak.

Why $7? It’s more or less double its all-time high of $3.60, set in January 2018, which I deem to be a highly plausible target when accounting for the progress Ripple and XRP Ledger (XRPL) have made to their respective products over the past six to seven years.

Moreover, when accounting for inflation, we’d need to see a price of around $4.60 per token to truly return to its ATH, possibly higher, depending on when (or for the detractors, if) it sets a new top.

So, $7 isn’t that far-fetched, and I am reluctant to get into double digits. We need to remember that over 55.8 billion tokens are in circulation, not to mention that the total supply is around 99.9B.

Furthermore, a tiny amount of XRP is burned per transaction. While this represents a small quantity for now (317,271 tokens in Q4 2023; 636,184 tokens in Q1 2024, up 101% QoQ), this will increase as more XRP transactions are processed.

Ripple’s upcoming stablecoin

Since entering the scene in 2013, the company has positioned itself as a leading player in blockchain-based gross settlement systems. Its lightning-fast transaction speeds and dirt-cheap transaction fees of a fraction of a cent make using XRPL a much better option than using other permissionless (public) blockchains such as Bitcoin and Ethereum.

As such, if anyone is best suited to release a stablecoin, it would be Ripple. It intends to release Ripple USD (RLUSD) –  a 1:1 USD-pegged stablecoin by year’s end.

Source: Ripple at X (formerly Twitter)

I’m waiting for a nonsensical argument about how it is problematic for Ripple to do this. 

In case one needs reminding, 99% of stablecoin trading volume goes via three companies: Tether, Circle, and First Digital, with the vast majority currently controlled by the former.

The only major decentralised stablecoin is Dai (DAI), but that’s just a drop in the bucket compared to Tether’s USDT or Circle (USDC).

Dozens of clients and partnerships worldwide
Ripple has partnered with various financial institutions around the world, including major names such as SBI Holdings (based in Japan), IndusInd (India), Travelex, SCB (Thailand), Banco Rendimento (Brazil), and Tranglo (Malaysia).

Having these customers across different continents—particularly throughout the developing world—will benefit billions by improving their access to financial services and significantly reducing and speeding up remittances.

In a post and tweet published last week, Ripple outlined several trends for cryptocurrencies, asset tokenisation, and regulatory updates in Africa. It is one of the regions that will benefit greatly from access to blockchain technology, especially with ultra-fast and cheap money transfers.  

 

Source: Ripple at X (formerly Twitter)

Check out the following links from the company’s website for Ripple customers and partners.

Unwavering support for the project

XRP’s community remains strong despite the US SEC’s best efforts to take down Ripple and subdue XRP’s price growth.

Hundreds of thousands of supporters across various social media channels, including over 2.7 million followers on X (formerly Twitter) for Ripple’s official page. For context, Bitcoin and the Ethereum Foundation (@ethereum) have 6.7M and 3.4M followers, respectively.

Besides social media activity, another metric to consider is ongoing developer activity building on XRPL.

The chart below shows that the total number of monthly active (single- and multi-chain developers) has been trending upward since 2017, notwithstanding the token’s ATH in 2018.

Source: Electric Capital Developer Report, via Crypto Ecosystems Github.

Despite years of price stagnation, plenty of XRP influencers (and Maxis) still publish regular updates about the token and Ripple. Crypto Eri, Digital Asset Investor, and Kevin Cage are good examples that come to mind; Thinking Crypto (Tony Edward) has useful content and covers XRP content from time to time. There are other commentators, but I will refrain from promoting them.

Ripple’s annual conference, Swell, still attracts major crowds and much hype in the lead-up to each instalment. The next event will take place in Miami in October. I expect the company to announce its IPO plans around that time, as we’ll most likely see the end of the lawsuit saga by then.

Ripple IPO

The company has contemplated an IPO for several years, which will most likely occur once a resolution is made with the US SEC. At that point, we’d never again have to discuss further developments in this case.

Whenever it happens, Ripple will be the second (high-profile) crypto/blockchain-tech enterprise to go public, with Coinbase doing so in April 2021.

I say when, as I believe it’s a matter of time. I imagine there’ll be an announcement within the next six months.

Besides the firm’s foray into stablecoins, its work on asset tokenisation helps diversify its revenue strategy over time rather than solely focusing on working with banks to transact value through XRPL.

These additional use cases, coupled with the company’s longevity (despite being a relatively nascent industry), should instil more confidence in prospective shareholders looking for viable crypto/blockchain-tech stocks.

The US SEC vs Ripple Labs saga is coming to an end

I’m getting sick of hearing about this case after so many years, and I imagine most of you want to see the end of it so we can all move on.

Eventually, we’ll get an agreement/settlement between the two parties. Ripple Labs (i.e., Ripple) can then focus on its use cases, such as cross-border payments, tokenised assets, and implementing central bank digital currencies (more on the latter later in the piece).

Arguments against Ripple and XRP – The bearish scenario

To play devil’s advocate and be even slightly impartial, I acknowledge that XRP and Ripple have their detractors, some of which present valid concerns.

Some of the main arguments against XRP include:

– Insufficient decentralisation vs Bitcoin, Ethereum and other major blockchains:

According to the XRP Ledger (XRPL) website FAQs:

“In terms of validation, there are 150+ validators on the network with 35+ on the default Unique Node List — Ripple runs only 1 of these nodes.”

XRPL must find ways to increase the number of unique nodes and ensure greater network decentralisation. XRPL Explorer and XRP Scan report 610 nodes and 123 validators, with the former showing the geographic distribution of nodes.

I acknowledge that the major impediment here is risking scalability (and throughput, i.e., transactions per second) to achieve greater decentralisation and security (see ‘Blockchain Trilemma’).

Yet, Bitcoin and Ethereum remain the two most dominant blockchains due to their robust security and, in Bitcoin’s case, high network decentralisation.

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Ripple’s large XRP holdings:

Even though the company still holds many tokens, a few minutes of basic research can go a long way.

It has been well-known since 2017 that Ripple is selling up to a billion tokens per month, with 55 billion tokens contained within a group of escrows. Unsold tokens get pushed to the back of this queue, and further sales still occur beyond the initial 55-month plan.

I recommend reading the related Ripple XRP Escrow explanation at the official XRP Ledger website.

XRP token concentration

According to this Techopedia article, the ten largest XRP wallets reportedly hold over 41% of the total supply, with the top 100 accounting for roughly 71%.

Besides Ripple, other large entities, including Kraken, Binance and Coinbase, control significant amounts of tokens on behalf of their clients, as is the case with other crypto assets.

For perspective, the top (104) BTC wallets hold about 20% of circulating coins.

“Ripple controls the XRPL”

Ripple runs one node out of over 120 validators, 36 of which are on XRPL’s Unique Node List and represent some of the most reputable ones.  

Hence, this claim is straight-up BS.

There’s always the risk that these numbers will drop and fewer players will control the network, thus risking decentralisation. However, if this were to occur, it would be readily addressed by XRP community members monitoring the network in real-time.

Additional thoughts

Even if you don’t believe in XRP’s longevity, there’s a decent chance it will outperform BTC in the next 12-18 months. This also considers its fully diluted market cap, currently at $46.5 billion.  

On the back of some anticipated announcements, e.g., the official lawsuit settlement, the The RLUSD launch, an eventual ETF, and the Ripple IPO date, I’m banking on price spikes and good opportunities to take profits, including a portion being converted to BTC or ETH. This will also depend on where we are in the market cycle.

Despite concerns about XRP and Ripple, regulators will be more inclined—at least in the coming years—to utilise a moderately decentralised public blockchain affiliated with a regulated, centralised company than its highly decentralised equivalent with an anonymous owner.

https://x.com/rajatsonifnance/status/1736814010627240179

Another factor that will help propel its price towards $3.60 is when we get back into a fully-fledged bull run, which many are expecting to come in a matter of months – Q4 this year or by the end of Q1 2025 – especially if history rhymes.

Even terrible and mediocre altcoins and tokens pump during these intense bull cycles. So, if you perceive XRP to fall into one of these categories, there’s still a high likelihood its price will significantly appreciate.

Two things that could prevent this from occurring are:

– If there’s still no settlement reached by the time we get back into “altcoin season”

– If a major hack or similar issues occur with XRPL, which, based on its security and longevity to date, is unlikely to occur (but never impossible).  

Ripple and XRP have continued to grow and have maintained their status as dominant entities within their respective categories. At the same time, many legacy projects have come and gone (remember EOS and IOTA?).  

The constant bickering between XRP and BTC maximalists is futile. These assets and their related blockchains will coexist with other digital assets for years to come, and these will establish and find their niches, both playing their respective roles in overhauling outdated, opaque and inefficient systems that have favoured TradFi for too long.

In conclusion, based on the abovementioned points and bullish signs covered throughout this, there’s a high probability that XRP could hit $7 per token in the next market-wide bull run.
 

Ways to stay in the loop with Ripple and XRP

– Official Ripple website and separate XRP page
– Whitepaper
– Twitter
– Ripple Insights – the official blog
– YouTube
– Reddit
– Telegram
– Discord
– Brad Garlinghouse (Ripple CEO)
– David Schwartz (Ripple CTO)
– XRP Ledger page (including Developer Resources)
– XRP Ledger Foundation (an independent, non-profit entity unrelated to Ripple)
– XRP LF GitHub docs

A quick shout-out to Dario Šuveljak (Stedas Crypto) for all the useful Ripple and XRP infographics produced since 2018.

Source: Dario Šuveljak (Stedas Crypto) > Lightning Network vs Ripple ODL
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Disclaimers

•          N.B. None of this is financial advice; I am not a financial advisor. You are ultimately responsible for crypto investments, let alone in any asset class.

• The opinions expressed within this piece are my own and might not reflect those behind any news outlet, person, organisation, or otherwise listed here.
• Please do your own research before investing in any crypto assets, staking, NFTs or other products affiliated with this space.
• Information is correct at the time of writing.• XRP makes up about 5% of my crypto portfolio.

 

Image by BT Side at Shutterstock
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Originally published at https://www.cryptowithlorenzo.com