In the world of cryptocurrency, where speculation often runs wild, Chad Steingraber, the Creative Director at Ghostpunch Games, has presented an ambitious case for the possibility of XRP, a digital asset, reaching an astonishing price point of $20000. While it’s essential to acknowledge that these are speculative ideas with no guarantee of occurrence, Steingraber’s insights offer captivating food for thought and explore the factors that could potentially influence XRP’s future value.
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If you haven’t read my theory from the future.. I think you should give it a thought. 😎 https://t.co/d7ysY5euXc
— Chad Steingraber (@ChadSteingraber) July 25, 2023
The Three Fundamental Principles Influencing XRP Value
Steingraber starts his argument by outlining three fundamental principles that play a role in determining the value of any asset:
- Supply and Demand: One of the classic economic principles, the scarcity of an asset with a limited supply, can significantly drive up its price when demand surges. In the case of XRP, with a fixed supply of less than 100 billion coins, scarcity could become a driving factor if demand increases substantially.
- Market Appreciation: Steingraber draws an analogy with real estate, where assets appreciate over time, leading to an overall increase in the market’s value, even with limited money injection.
- Limited Assets: Unique and culturally significant assets, like the Mona Lisa, often hold immense value due to their limited availability. In the case of XRP, it’s limited supply and deflationary mechanism caused by burning small portions of XRP during ledger transactions add to its uniqueness.
XRP Current State and Potential
Presently, XRP’s market capitalization hovers around $37.7 billion, an increase from $18 billion previously. It’s essential to note that market capitalization merely reflects the current value people are willing to pay and doesn’t represent the total amount of money invested in XRP.
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Steingraber emphasizes the significance of XRP’s circulating supply, which plays a pivotal role in influencing the asset’s price. With its limited supply and deflationary mechanism, XRP’s value could see substantial appreciation if demand continues to grow.
XRP’s Role in Institutional Adoption
The Creative Director delves into the role of Ripple’s On Demand Liquidity (ODL) service, designed for small banks and money transmitters rather than major financial institutions like Bank of America, Chase, or Wells Fargo. Steingraber argues that major players require privacy for internal ledger transactions, making XRP less suitable for public retail trading.
Instead, he speculates that banks may create private XRP ledgers and issue their derivatives, akin to central banks holding gold as a backing asset. This scenario could see XRP becoming a reserve currency asset, with banks creating their derivatives on the XRP Ledger. For instance, Bank of America could issue “BOAcoin” on the XRPL, backed by XRP as a reserve asset.
The Path to $20000
According to Steingraber, the path to XRP reaching $20,000 would be tied to its role in enabling cross-border transfers for major financial institutions. In this scenario, XRP would become an indispensable and highly sought-after asset. Large banking corporations and Institutional Grade Liquidity Providers (IGLPs) would rely on XRP to facilitate exchanges between these private coins, potentially leading to the speculated price point.
It is essential to reiterate that these are speculative ideas presented by Chad Steingraber and not guaranteed outcomes. XRP’s current price of $0.7155 would need to experience an unprecedented appreciation rate of 2,795,148% to reach $20,000, making this an extraordinary scenario.
Nevertheless, Steingraber’s insights offer a fascinating exploration of how certain factors and mechanisms within the XRP ecosystem could potentially influence its price trajectory. As with any investment in the crypto space, caution and careful consideration should be exercised, and predictions should be taken with a healthy dose of scepticism.