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Opinion | Ripple Fundamental Analysis: Will Ripple hit $1000 in the long term?

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TL;DR Breakdown

  • On our Ripple fundamental analysis, XRP witnessed a standard deviation of 11.5 percent in daily returns
  • Ripple (XRP) posted the highest daily volumes to be recorded
  • During press time, XRP’s total market capitalization sits at $58.129 billion.

It’s time to burst the majority of unfounded claims flung around the crypto community about Ripple’s XRP having weak fundamentals. In fact, Ripple is among the most entrenched yet vilified cryptocurrency projects today. 

Ripple (XRP) witnessed a standard deviation of 11.5 percent in daily returns between April – August. High volatility in comparison to both Bitcoin and Ethereum must have been informed by April’s rally and the subsequent May crash .

The following chart showing XRP Price against volume between Q1 and Q2 of 2021 reports doubling figures over a 6 month period from $2.26 billion to $4.49 billion. Interestingly, Ripple (XRP) posted the highest volumes to ever be recorded on any cryptocurrency chart. 

Ripple Fundamental Analysis
Source: Ripple Labs

Ripple Fundamental Analysis: Long -term future of XRP/USD

On a Reddit thread dating  7-months ago, one user dismises another user’s claim that XRP will hit $10K and tells him  he’s been smoking too much opium. However, the former goes ahead and boldly claims $20 or $40 for XRP is still stretching the coin’s potential way too far. 

Well, let’s expain the direction of XRP in the future based on facts rather than social media chit chats and see whether $1000 is a reality? 

The price of any cryptocurrency is usually pegged to the size of its market capitalization. A third of the $1000 target lies somewhere between $300 – $350. During press time, the total market capitalization sits at $58.129 billion. It would require atleast a $13.2 trillion market cap for XRP to hit a third of $1000 (that’s $300). XRP hitting $100 demands a $4.4 trillion market capitalization. 

The market leader Bitcoin has a $917 billion valuation; when making the comparison,  XRP has to be approximately 13 times the size of BTC to reach $350. Hence making the chances less likely.

It would take a great deal of time for the coin to reach $1000. But here is the kicker -; 

Ripple is a bankers’ system and most bankers would prefer the price to remain within the dollar cents – 1 dollar range. This would make it easy for banking institutions to compute their trustline and simplify processing large-scale transactions.  

Better yet, the cryptocurrency is still subject to inflation if it is adopted on a large scale by banks and institutions across the world. The size of the banking sector globally is projected at $22.5 trillion by the end of 2021, with an annual growth rate of 9.9 percent. Could Ripple (XRP) clinch just a quarter of that ($ 5.625 trillion) , the price of the token could hit between $100 – $150. 

Thinking along this theorem brings the $350 target closer home. It becomes further persuasive when you think in terms of Ripple as a financial system for making banks more robust and streamlining real-time bank transactions. Literally, almost everyone in the world dependent on a bank account would benefit from the altcoin. 

Conclusion

What I find as a big reason behind  the crypto community’s vilification of XRP is its alignment in sering the traditional financial sector. That’s not something an staunch Bitcoiner would approe. Along these lines, the belief is XRP will only exists as long as banks exist. You pretty well know what bitcoiner think of banks in the next 10-20 years. Definately, decentralized finance could take over and XRP would lose its place in the fintech spectrum. 

Disclaimer. The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decisions.

Disclaimer. The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decisions.

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