An analyst now says XRP will surge to $1,000 based on several factors, one of which includes institutions adopting the crypto.
A recent commentary from Crypto Tank, a notable figure in the XRP community, has reignited discussions about the possibility of XRP surging to $1,000.
Crypto Tank argues that skeptics of this price target may not fully appreciate the extensive utility XRP could bring, particularly within the global financial system.
To understand how XRP might achieve such extraordinary valuations, it’s essential to analyze current global financial frameworks and the advantages of incorporating XRP.
The SWIFT system, which underpins cross-border transactions, processes between $5 trillion and $7 trillion in daily messaging volume.
However, SWIFT only handles transaction messaging; actual settlements occur through systems like TARGET2 in the EU or FEDWIRE in the U.S.
SWIFT’s existing model faces significant challenges, particularly regarding speed and cost. Each transaction message can incur costs ranging from $20 to $50, with settlements often taking several days.
In contrast, integrating RippleNet could streamline the entire transaction process—covering both messaging and settlement—in just seconds and at a much lower cost.
This transition could save banks hundreds of billions in fees annually.
Crypto Tank posits that as financial institutions recognize the substantial savings offered by XRP, the incentive for adoption will grow tremendously.
If only 10% of SWIFT’s daily volume were settled using XRP, that would translate to about $500 billion in daily transactions.
Additionally, major financial entities like JPMorgan, Bank of America, and SBI manage trillions in daily volumes, highlighting XRP’s potential if it captures even a small share of these transactions.
For XRP to be utilized effectively by banks, a robust liquidity pool is necessary to facilitate smooth transactions.
Liquidity pools on the XRP Ledger (XRPL) could enable seamless transfers among digital tokens, central bank digital currencies (CBDCs), and various fiat currencies.
To support $500 billion in transactions via XRP, the liquidity pool would need to contain around $1 trillion in assets.
The price of XRP is intrinsically linked to its ability to facilitate high-value transactions on the XRPL. Crypto Tank explains that XRP’s value must increase in tandem with the volume it supports on the ledger.
Currently, the circulating supply of XRP is approximately 56 billion tokens, but this number can be misleading.
Ripple holds about 39 billion of these tokens in escrow, with many others distributed among retail investors, whales, and financial institutions.
Given the limited availability of XRP for liquidity pools, the effective circulating supply for transactions may be significantly lower than reported.
If only 10 billion XRP were allocated to these pools, the token’s price would need to reach around $100 to support a $1 trillion liquidity pool.
As more financial institutions begin to adopt XRP, this figure could climb even higher, potentially pushing the price towards the much-discussed $1,000 mark.
XRP is currently trading at $0.62 at the time of this publication.
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