XRP price could surge to unimaginable levels if the asset’s utility in payments grows to allow it to cover 25% of global financial transactions.
XRP may not be hitting new highs lately, but most community members still see huge potential in it. Specifically, proponents argue that the token is undervalued, especially given its real-world use in payments.
XRP Boasts Massive Utility in Payments
As Ripple’s payment infrastructure continues to grow, so does the belief that XRP’s utility could eventually drive its price much higher. However, it is important to understand the scale of the global financial scene in order to confirm how high the XRP price could go if it captures a large chunk.
Notably, in 2023, a report by Telegeography indicated that estimates suggest global financial transactions total about $10 trillion each day. The report also hinted that the actual number might be even larger. Still, for practical purposes, most estimates continue to use the $10 trillion mark.
With that in mind, we asked ChatGPT what might happen if XRP handles 25% of those global transactions, or about $2.5 trillion daily. At the time, XRP traded for $2.16, had a circulating supply of 58.88 billion, and a market cap of $127.6 billion. Daily trading volume came in at about $2.738 billion.
XRP Price if It Handles 25% of Global Transactions
In response, ChatGPT presented several methods for evaluating the XRP price using these figures. In the first approach, it looked at what would happen if XRP’s price rose in direct proportion to its transaction volume.
Since the current price reflects a daily volume of roughly $2.7 billion, scaling that up to $2.5 trillion would put the XRP price at around $1,972.50. Notably, this estimate assumes there is a straight-line relationship between price and usage. However, this doesn’t always hold up in real markets.
Next, ChatGPT used the Network Value to Transactions (NVT) ratio, a measure similar to a price-to-earnings ratio in stock markets. Assuming XRP became a major settlement asset and maintained an efficient NVT of 20, its market cap would rise to $50 trillion.
Dividing that by the current supply leads to a price of about $849.38. Interestingly, a lower NVT of 10 would suggest a price near $424.69, while a higher NVT of 40 would push it closer to $1,698.75.
Meanwhile, in its third method, ChatGPT assessed how XRP might work as a bridge currency. Specifically, this model focuses on liquidity, referencing how much value XRP needs to move each day.
If each token changed hands just once a day, it would need to carry the full $2.5 trillion, placing its value at about $42.47. If XRP moved ten times a day, the price would fall to around $4.25. At twenty transactions per day, the price would settle near $2.12, close to where it trades now.
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.
