Angel investor Armando Pantoja breaks down the common misconception about XRP regarding market cap and inflow.
As XRP continues to gain institutional adoption, questions about its price potential persist. One of the most debated topics is whether XRP could realistically reach $100 per coin without requiring an unrealistic amount of capital inflow.
According to angel investor and crypto educator Armando Pantoja, the answer is a resounding yes. He emphasized that it all comes down to understanding the difference between market capitalization and liquidity inflow.
Market Cap vs. Money Inflow
Pantoja explains that many critics mistakenly believe XRP would need over $5 trillion in new capital to move from its current valuation to a $5.8 trillion market cap, a point that implies a price of $100 per token.
“That’s completely and utterly untrue,” Pantoja says. “Only about $20 to $30 billion would need to flow into XRP over a short period to push it toward that level.”
According to Pantoja, the misunderstanding stems from equating market capitalization directly with real money entering the market. In reality, market cap is calculated by multiplying the asset’s current price by its total supply.
This means a price increase, often triggered by relatively small buy orders in a thin liquidity environment, can dramatically inflate the market cap, even if only a modest amount of capital has changed hands.
Explaining Thin Liquidity in Crypto Using Real Estate
To explain the concept of thin liquidity, Pantoja illustrates how a small amount of money can have an outsized effect on price in a market like crypto.
“In a mature market, shifting prices takes a lot of capital. But crypto is still young. A little money goes a long way,” he noted.
To make the concept more tangible, he compared it to real estate. If one house in a neighborhood of 100 sells for much more than the others, the perceived value of the entire neighborhood increases, even though only one transaction occurred at the higher price.
More specifically, say there’s a neighborhood with 100 houses, each worth roughly $500,000, giving the area a total “market cap” of $50 million.
“Now, let’s say I really want to buy one of these houses. However, no one is selling. I offer $600,000, no deal. $700,000, still no. $800,000, nope. Finally, I offer $1 million, and the owner agrees,” Pantoja explains.
Instantly, all similar houses in the neighborhood are now considered to be worth $1 million based on comparable sales. That’s how markets operate; valuation is based on the last sale price multiplied by the total supply.
Essentially, if all the houses are now “worth” $1 million each, the neighborhood’s market cap becomes $100 million even though only $1 million actually changed hands. In reality, only $500,000 more than the previous valuation was spent, yet the perceived value of the entire neighborhood doubled.
Implications for XRP Investors
Pantoja uses this example to emphasize that XRP investors shouldn’t be misled by the notion that reaching a specific market cap requires a proportional amount of cash inflow. If demand spikes and supply is limited, even temporarily, the price of XRP can rise significantly with relatively limited capital.
According to Pantoja, the $100 target for XRP is not merely a dream, but a realistic scenario under the right market conditions.
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.
