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- Ripple’s XRP is gaining attention from investors and financial institutions due to discussions about the potential benefits of a significant price increase.
- Crypto researcher Anderson highlights that a higher XRP price could transform Ripple and the broader XRP ecosystem.
XRP, the digital asset native to the Ripple network, is a focal point for investors, researchers, and financial institutions alike. A recent tweet from digital asset researcher Anderson has shed light on the potential advantages of a high-priced XRP for the broader XRP ecosystem and community. In his commentary, Anderson delves into several key areas where a surge in XRP’s price could be transformative.
A high priced XRP will be good in several ways!
🔹 More people will find out about XRP by people talking about it, news headlines and just by people looking up the top coins.
🔹 More builders and people who wants to participate in the XRPL ecosystem will be attracted to…
— Anders 🏁🌏 (@X__Anderson) November 30, 2024
Insights from Researcher Anderson
Anderson’s first point emphasizes that a higher price for XRP would likely attract more attention to the cryptocurrency. In a competitive digital asset market filled with numerous options, standout price movements often serve as a beacon for investors and analysts.
This increased visibility can lead to greater acceptance and adoption as curious newbies enter the market with a fresh perspective on XRP’s utility and capabilities. As examples, we have seen other cryptocurrencies, like Bitcoin (BTC) and Ethereum (ETH), experiencing similar boosts in public interest during price surges, which often translate to increased market participation.
Attracting Builders and Innovators
A rising XRP price could significantly enhance visibility and attract more developers and builders to the XRPL ecosystem, particularly as it plays an increasingly important role in tokenizing real-world assets (RWAs). XRPL aims to lower operational costs and streamline settlement processes, as demonstrated by recent advancements, such as introducing the first tokenized money market fund through Ripple’s partnership with UK-based firms Archax and Abrdn. Additionally, OpenEden expanded its tokenization platform to the XRPL following Ripple’s $10 million investment in tokenized US Treasury bills.
One compelling aspect of the XRPL is its Automated Market Maker and the RLUSD stablecoin, which allow investors to trade directly against a pool of tokens and provide stability and predictability in the volatile cryptocurrency market, respectively. The surge in XRP’s value is set to benefit the XRPL network even further, boosting its appeal among innovators and builders.
Strengthening Partnerships with Financial Institutions
Anderson takes note of an example that occurred during the late 2017 surge in XRP prices that sparked another breakout, resulting in a year-long rally that saw XRP soar to it’s all-time high of $3.30 in January 2018.
As a result of the spike, Ripple’s CEO, Brad Garlinghouse, mentioned that banks began to approach Ripple for partnerships. Currently, more than 100 institutions have joined RippleNet, including notable banks such as Santander (USA), Canadian Imperial Bank of Commerce (Canada), Kotak Mahindra Bank (India), and Itaú Unibanco (Brazil). Imagine the number of banks and institutions Ripple could attract if XRP surges to a new ATH.
Financial Empowerment for Ripple
An increase in XRP’s price would be highly beneficial for Ripple. With a significant amount of XRP held in reserve, a price surge would substantially enhance Ripple’s financial standing, allowing the company to leverage this newfound wealth for strategic growth initiatives and technological advancements.
Additionally, the unique structure of XRP, which does not rely on traditional blockchain practices like mining or staking, further amplifies this benefit. Instead, all 100 billion XRP tokens were created by Ripple, with a defined release schedule through an escrow system that releases one billion XRP each month over the next 55 months. Ripple holds a total of 42.86 billion XRP in escrow and spendable balances, and with XRP currently priced at $2.44, this portfolio is valued at over $104.6 billion.
Impact of XRP Price Increases on Adoption and Liquidity
Rising XRP prices can drive broader adoption of the cryptocurrency by businesses beyond Ripple, increasing its liquidity and functionality. The diverse use cases for XRP, including e-invoicing, international supply chain payments, global currency accounts, real-time cash pooling, international bill payments, and remittances, would see enhanced utilization.
Simultaneously, a higher XRP price enhances liquidity, making it a more effective bridge asset for digital transactions. This increased liquidity allows Ripple to optimize its On-Demand Liquidity (ODL) services for smoother cross-border transactions, accommodating larger transfers and reducing costs for smaller amounts. As a result, XRP appeals to a wide range of users, from large enterprises to individual consumers.
At the time of writing, XRP is priced at $2.54, reflecting a 4.41% decrease in the past 24 hours but a 2.41% increase over the last week.
