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HomeCrypto NewsMarketExpert Explains Why XRP Isn’t Moving, Explains How XRP Price is Determined

Expert Explains Why XRP Isn’t Moving, Explains How XRP Price is Determined

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Crypto Tank, an XRP community figure, recently responded to inquiries on why XRP has not moved favorably in recent times, spotlighting its potential utility in payments.

In his latest news on XRP, Crypto Tank confirmed that he had received multiple questions about why the XRP price was not moving. His commentary suggests a lack of utility, especially from major financial institutions, could be responsible for hampering XRP’s upward growth.

XRP Projected Growth

In his recent commentary, Crypto Tank discussed XRP’s utility. Interestingly, he outlined the mechanisms within the XRP Ledger (XRPL) that, in his view, make higher prices achievable. 

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How XRP Price is Determined

He centered his argument on the idea that XRP’s price comes from dividing the value and volume of transactions on the ledger by the circulating supply. While the general consensus is that XRP’s circulating supply is around 56 billion tokens, he suggests this figure is inaccurate.

According to Crypto Tank, the market does not actively use much of the circulating supply, as private wallets from whales and exchanges hold most of it. He estimates that only the market only uses around 20% of the supply, or roughly 10 billion tokens, in transactions on a daily basis. 

Role of Financial Institutions and Liquidity Pools

The core of Crypto Tank’s prediction rests on XRP’s potential to become the primary token for settlement by banks and financial institutions. 

He outlined how banks will eventually use their own tokens, such as Central Bank Digital Currencies (CBDCs), paired with the Ripple stablecoin RLUSD in Automated Market Maker (AMM) pools. XRP, being the default settlement token on the XRPL, will play a major role in this process.

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To give a sense of the scale, Crypto Tank pointed out that major institutions like SWIFT, SBI Japan, Bank of America, and J.P. Morgan handle trillions of dollars in settlements daily. 

He suggested that if just 10% of the XRPL processed just 10% of these transactions, that would amount to $2.5 trillion in daily volume. To ensure smooth operations without failed transactions, he argued that the liquidity pools would need to be double that value—around $5 trillion.

Notably, this massive influx of volume would require a deep pool of liquidity, and based on his calculations, XRP would need to trade at $500 per token to provide the necessary liquidity for these transactions. 

He further speculated that as more assets, such as tokenized real estate and tokenized debt, are introduced onto the XRPL, the demand for XRP will increase, potentially driving its price even higher. Crypto Tank argued that market cap discussions are irrelevant.

Note: This article was reviewed and Updated at 9:02 UTC.

DisClamier: This content is informational and should not be considered financial advice. The views expressed in this article may include the author's personal opinions and do not reflect The Crypto Basic opinion. Readers are encouraged to do thorough research before making any investment decisions. The Crypto Basic is not responsible for any financial losses.

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Sam Wisdom Raphael
Sam Wisdom Raphael
Sam Wisdom Raphael is a seasoned crypto news writer and journalist with 5 years of experience covering blockchain, DeFi, and crypto developments. Sam's active presence in the crypto community complements his deep understanding of the crypto space, allowing him to craft comprehensible price analysis reports and tackle technical blockchain concepts.

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