XRP is the cryptocurrency from Ripple, formerly known as Ripple Labs.
It has been in the top 10 cryptocurrencies for over 18 months and the owners, Ripple, are continuing to develop and create a method to disrupt the bank-to-bank transfers industry with speed, security, and reduction of fees for users.
With such a feasible goal, and interest from global banks, many have speculated that the value of XRP could increase to $10 or $100, or beyond.
With an incredible amount of research, and analysis past and projected trends, we have looked in to how feasible such a growth would be for XRP, and what would be required for this milestone to be achieved.
There are some incredible plus points to XRP and their owner, Ripple, views of payment transfers but there are some concerning negatives that need to be factored in.
In this article we will look at what XRP is, how Ripple intend to achieve their goals and whether XRP could achieve a $10 or $100 a coin target.
What is XRP
Despite the continued name changes for the company behind Ripple, the XRP cryptocurrency came along as far back as 2012, which is a surprise to many.
Ripple has been working, for a while now, on a financial solution to speed up bank to bank transfers, whilst reducing fees to consumers.
Trading money between banks and countries has for decades been a slow and costly process. At times intermediary banks are used to transfer funds, particularly through the SWIFT network, which costs the sender or receiver even more.
A current transfer of funds between banks overseas takes 3 working days, but this can be a lot longer.
Ripple aims to solve that by making transfer almost instant and by being able to manage many more transactions per second than the SWIFT network.
The cryptocurrency created by Ripple, XRP, was intended to be used as a token that could be traded between banks for these fast transfers irradicating the need for currency exchanges.
If the banking systems not only adopt the Ripple network for money transfers, but also XRP to fulfill them, then the XRP token could incredibly valuable.
Importance of XRP Market Capital
Now we understand what XRP is, it is important to understand what the market capital of XRP looks like and how we can use this to determine how possible it is for XRP to reach $10 or $100 a coin.
The current market capital of XRP is $22 billion (as at Autumn 2022).
This is in comparison to Bitcoin at $366 billion, Ethereum at $162 billion and Decentraland at $1.2 billion.
Although the current coin price is around $0.50, and Bitcoin at nearer $20,000 a coin, it looks as if XRP doesn’t have far to go to get to a $10 or $100 price.
It would still make it considerably cheaper per coin than Bitcoin.
Unfortunately, this is not how the price of cryptocurrency works.
Market capital is a calculation of the current price multiplied by the number of coins in circulation.
There are 49 billion XRP coins in circulation compared to just 19 million Bitcoin, and as there are so many XRP coins in the system it leads to a lower price.
This means to work out whether XRP can reach $10 or $100 we must look at what market capital needs to be achieved to get there, and how feasible this is.
Can XRP Reach $100
Let’s look at the higher amount first, and whether XRP can reach the heights of $100 a coin.
To reach a $100 per coin value, with 49 billion coins in circulation, XRP will need to have a market capital of $4.5 trillion and be worth 200 times more than it is now. Considering Bitcoin has a market capital of $366 billion, and Apple has a market capital of $2.4 trillion, this looks unlikely.
XRP would need to be double the value of Apple or twelve times the value of Bitcoin to achieve a $100 per coin value.
We will look at the pros and cons of both Ripple and XRP later in this article, but, in summary, unless the banks adopt XRP as the main cryptocurrency for all bank money trades it will be almost impossible to achieve this value.
Can XRP Reach $10
If $100 a coin looks out of reach, what about $10 – could XRP reach $10 in the next 2-3 years.
To reach $10 per coin value, with 49 billion coins in circulation, XRP will need to have a market capital of $450 billion. This would create a worth more than Bitcoin at $366 billion and more than Meta (Facebook and Instagram) at $361 billion. It will be a challenge for XRP to reach $10.
Although this would prove a challenge and have a difficult path, it is at least possible.
Adoption by the banks would be required, but XRP would not necessarily need to be the main way of bank money transfers, it would simply have to be a sizeable part.
XRP is certainly known and established in the cryptocurrency space, and as mentioned earlier, it has been within the top 10 cryptocurrencies for 18 months now.
Stranger things have happened in the crypto space!
Benefits of Ripple and XRP
Although we now know what XRP is, to understand whether the cryptocurrency could 20x or even 200x in value, it is important to understand the benefits of Ripple and XRP – and after which we will look at some of the negatives, and concerns investors have, to help provide an all-round summary.
The process of sending money internationally through the SWIFT system is long, arduous, slow, and costly.
Having worked with SWIFT for several years I can see why a company such as Ripple wants to disrupt the space.
It’s sitting there waiting to be disrupted!
The world is getting faster, and an antiquated payment transfer process doesn’t fit.
By launching the XRP cryptocurrency, Ripple provided the banks an option to trade in a universally valued cryptocurrency with which to trade – rather than exchanging money in different currencies which must be agreed in value by the banks throughout the process. This also adds to the overall time and fees.
Banks are interested, and partners are signing up with Ripple to use their networks.
This looks a good argument for XRP increasing in value, but of course, like always, there are some caveats and negatives to consider.
Negatives of Ripple and XRP
The more someone delves into the details behind Ripple and XRP, the more negatives seem to be found.
Cryptocurrency was founded based on decentralization, which is the concept of money and assets of the world not to be controlled by large blue-chip corporations, but by everyday people using set in stone code, algorithms and voting power.
It has long been the biggest argument for people to move over and want to adopt cryptocurrencies and Web3 in general.
The XRP cryptocurrency though is not decentralized.
Validations on the XRP network are controlled by a group of people nominated by XRP.
It in theory means these people could control the network, and everyone’s money, which is a far cry from decentralization.
Another key factor is that so far, the banks, although are keen on Ripples system and network offering, have not adopted the XRP cryptocurrency very well.
This is because cryptocurrencies are volatile, and because XRP is not mandatory to use Ripple’s system, any monetary currency or cryptocurrency can be used.
Without it being mandatory there isn’t an incentive for the banks to use it, and unless they use it or it provides intrinsic value, the demand required to 20x or 200x in value will simply not be there.
Even if XRP falls to zero, it will not affect the Ripple company or service. They work independently.
What is the highest price XRP can reach?
So, if XRP reaching £100 looks incredibly unlikely, and reaching $10 a real challenge, what is the highest price XRP can reach?
If Ripple’s technology and networks do become the used system within the banking world there is a good chance the XRP cryptocurrency will also bask within its success, even if the XRP cryptocurrency isn’t widely adopted.
Both Ripple and XRP are well known and generally respected in the cryptocurrency industry, so a $50 billion to $100 billion valuation is a genuine possibility in the next 2-3 years.
If XRP reaches a $50 billion market capital, it will reach $1 a coin.
If XRP reaches a $100 billion market capital, it will reach $2 a coin.
Even $2.50 a XRP coin would put its value close to that of Ethereum, which is the second most used and highest market capital cryptocurrency, which has an arsenal of NFT trades, dApps and the mighty OpenSea support under its belt.
If Ripple’s goal goes according to plan there isn’t a reason why XRP couldn’t 4x in value and be worth $2 a coin.
As mentioned, strange things have happened in the cryptocurrency space over the past 5 years alone, so the right adoption at the right time by the right institutions could see XRP reach the $10 or even $100 value.
Though, this could be said for any cryptocurrency in the top 30.