XRP Price: Why XRP Price of $1000 Isn’t Just A Wild Fantasy, Says Expert
The analysis provided by Crypto Tank suggests that the potential value of XRP may be underestimated by those who do not fully appreciate its broad utility within the global financial system. To comprehend the possibility of XRP reaching unprecedented values, it is essential to consider the current state of the global financial systems and their potential for integrating XRP.
Significant of SWIFT
SWIFT, the Society for Worldwide Interbank Financial Telecommunication, plays a central role in cross-border transactions, managing a daily messaging volume of $5-7 trillion. However, while SWIFT facilitates messaging in transactions, the actual settlement occurs through additional processes such as the TARGET2 system in the European Union or FEDWIRE in the United States.
SWIFT’s current system faces challenges in terms of both speed and cost, with messaging transactions costing between $20 to $50 and settlements taking days. By incorporating RippleNet, the entire transaction process, spanning messaging to settlement, could be completed in seconds at a reduced cost, potentially saving banks significant fees annually.
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The Analyst Stance
Crypto Tank argues that as financial institutions recognize the substantial cost savings facilitated by XRP, there will be a significant incentive for its adoption. Even if only 10% of SWIFT’s current daily volume were settled using XRP, roughly $500 billion in transactions per day would be involved. Furthermore, large financial institutions such as JPMorgan, Bank of America, and SBI manage daily volumes of trillions, emphasizing the potential impact of XRP if it were to capture even a fraction of these transactions.
For banks to effectively utilize XRP, a deep liquidity pool is necessary to ensure seamless transactions. Liquidity pools on the XRP Ledger (XRPL) could facilitate frictionless transfers between digital tokens, central bank digital currencies (CBDCs), and various fiat currencies. If these pools hold sufficient liquidity, they could support the settlement of large-scale transactions. For instance, to facilitate $500 billion in value through XRP, the liquidity pool would need to hold approximately $1 trillion in assets.
The value of XRP is intrinsically linked to its role in facilitating high-value transactions on the XRPL. According to Crypto Tank, the value of XRP must increase proportionally to the volume it supports on the ledger. Although the circulating supply of XRP stands at around 56 billion tokens, it is noted that Ripple holds a significant portion of these tokens in escrow. Furthermore, many XRP tokens are held by retail investors, whales, and financial institutions.
Available Liquidity Pool
Considering the limited availability of XRP for liquidity pools, the actual circulating supply used to facilitate transactions could be much lower than reported. Even if only 10 billion XRP were allocated to liquidity pools, the value of XRP would need to be approximately $100 per token to support a $1 trillion liquidity pool. As more financial institutions adopt XRP, this figure could potentially rise, driving the price closer to the widely discussed $1,000 mark.
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Meet Daniel Abang: Crypto guru, content creator, and analyst. With a deep understanding of blockchain, he simplifies complex concepts, guiding audiences through the ever-changing crypto landscape. Trusted for his insightful analysis, Daniel is the go-to source for staying informed and empowered in the world of cryptocurrency.
