Prominent YouTuber and XRP community member Mason Versluis recently provided clarification on what could happen if $100 trillion flowed through XRP, aiming to debunk past projections.
Interestingly, XRP has become the subject of ambitious price forecasts, use cases and projections. Given its immense potential, several XRP proponents have continued to project the trajectory of the asset’s future if it reaches these potentials.
One of these cases of ambitious projections considered the possible price implication for XRP if it can capture 10% of the derivatives market, about $100 trillion. These projections came up shortly after Ripple became a member of the International Swaps and Derivatives Association (ISDA) in August.
As The Crypto Basic reported, certain members of the community predicted that XRP could skyrocket to a price of $1,896 should $100 trillion from the derivatives market flows through it. However, these projections did not come without their inherent flaws.
Mason Versluis’ recent comments aim to point out one of these flaws. In a video, the community influencer provided clarification on the difference between flows into and flows through an asset. He stressed that if money flows through XRP, the implications would rest on the asset’s volume and not its market cap.
Notably, the earlier $1,896 prediction rested on the assertion that XRP’s market cap would need to soar for it to accommodate the $100 trillion flow. However, market cap pertains to flows into an asset, and not flows through the asset.
“That doesn’t necessarily increase its market cap. Market cap does not mean how much money is flowing through the coin. That’s not what market cap means. People don’t understand that you need to look at volume,” Versluis remarked.
Versluis then went on to highlight that XRP already sits at the top as one of the crypto assets with the largest 24-hour volume. Remarkably, XRP commands the third largest volume in the market, behind only Bitcoin (BTC) and Ethereum (ETH), with the exception of stablecoins.
Despite a 29.36% decline in trade volume at the reporting time, XRP still commands a volume of $1.27 billion. Average volume over the past week currently sits at $1.5 billion, with a peak of $2.2 billion on Oct. 31. XRP recently witnessed up to $10 billion in volume following the pivotal ruling in the Ripple vs. SEC case.
Notably, while capturing $100 trillion in fund flows could have significant effects on the XRP’s price and market cap, these effects are not particularly resolute and definitive. The effects of fund flows are immediately witnessed in the asset’s trade volume.