With XRP price showing minimal price movements in recent times, attention has shifted to its deflationary model and how it could help sustain price growth over time.

Popular XRP community researcher “SMQKE” recently reignited discussion on XRP’s long-term price potential by highlighting its deflationary design. In a tweet, SMQKE emphasized that XRP’s supply continually decreases due to its unique burn mechanism, making it fundamentally scarce.

The commentator also stressed that XRP is deflationary, adding that the token cannot be mined and that its supply is constantly shrinking. Supporting this claim, the tweet cited a statement from a published paper noting that anything limited in supply and actively used tends to become more expensive over time.

Deflation by Design: How XRP’s Supply Shrinks

Unlike many digital assets, XRP does not rely on mining. Instead, all 100 billion tokens were pre-issued at launch. What makes XRP notably deflationary is that a small portion, like 0.00001 XRP, is destroyed with every transaction. For context, this feature is to mitigate spam transactions.

Official documents from the XRP Ledger and Ripple-backed research confirm that this deflationary mechanism is built into the protocol’s core, with no system in place for inflation or token replenishment.

Notably, the XRP network has seen 13,919,025 XRP permanently removed from circulation since its inception. These tokens are neither redistributed nor collected by validators.

XRP proponents often argue that as transaction volume grows, the total circulating supply decreases, enhancing scarcity over time.

Meanwhile, despite the ongoing token burn, XRP’s total supply remains at 99,986,080,974 (approximately 99.98 billion). While many XRP supporters see this gradual reduction as bullish, critics often argue that it is inconsequential, as the overall supply remains nearly the same even after more than a decade of burns.

Expanding Utility as a Global Bridge Asset

Beyond its deflationary structure, XRP’s role as a bridge currency for global value exchange bolsters its long-term utility. The XRP Ledger supports the transfer of fiat currencies, cryptocurrencies, commodities, securities, and even loyalty points, making it one of the most versatile networks in the digital payments ecosystem.

Its speed and cost-efficiency are unmatched. XRP transactions settle in 3–5 seconds with fees averaging just $0.0002. This outperforms traditional networks like SWIFT, which can take days and cost up to $50 per transfer.

Competitive Edge Through Interoperability

XRP also maintains a strong position in the cross-border payments space thanks to its interoperability features. Its integration with projects like Axelar enables XRP to function across multiple blockchains, enhancing liquidity.

Analysts note that these interoperability bridges, along with XRP’s shrinking supply, contribute to its long-term value proposition.

Comparative analysis shows that XRP rivals centralized stablecoins like USDC and even emerging central bank digital currencies (CBDCs) by offering decentralization, lower fees, and superior cross-chain utility.

What’s Next for XRP?

With rising institutional interest, expanding use cases, and an irreversible deflationary model, XRP’s fundamentals appear increasingly strong.

Proponents argue that as more transactions are processed and more XRP is burned, the token becomes scarcer, potentially leading to a supply shock if demand increases faster than expected.

At the time of writing, XRP is trading at $2.30, down 1.65% over the past 24 hours.

A market analyst has shared his post-breakout XRP price target as the asset observes up to six months of consolidation.

For context, this consolidation trend, highlighted by market watcher Poseidon on the 12-hour chart, began in December 2024 immediately after XRP’s explosive 480% surge to multi-year highs. 

Stuck in a Consolidation Range

Specifically, following President Donald Trump’s victory in November 2024, XRP rallied from $0.5 to a six-year peak of $2.9 by Dec. 3, 2024. After this top, the asset faced a pullback and slipped into a consolidation phase that has persisted for six months now.

Interestingly, data from Poseidon’s chart shows that the asset’s price has oscillated between the $2 and $3 levels during the consolidation. Notably, the bears have leveraged the $3 mark as resistance against a break above the consolidation, while the bulls use the $2 level as support against a break below.

XRP has occasionally pushed above and below these psychological levels, but the price quickly witnessed a spike in either buy or sell pressure that brought it back into the consolidation range. Particularly, a push to $3.3 occurred in January 2025, and a drop to $1.6 occurred last month.

In his recent analysis, Poseidon confirmed that XRP is re-consolidating within the $2 range. However, he pointed to three clear signs of strength, indicating that the asset could be on the verge of a bullish breakout.

According to him, these signs include a failed breakdown, a reclamation of the 200 Exponential Moving Average (EMA) on the 12-hour chart, and a new higher high when XRP rose to $2.36 yesterday, Monday, May 26.

XRP to Targets $4 After Consolidation Breakout 

Citing these factors, he believes XRP is ready to break above the consolidation range. He identified a descending trendline that has capped XRP’s price movements since the May 12 high of $2.6, leading to lower highs. For the asset to break above this trendline, it has to surge past $2.4.

Poseidon believes this rise will confirm the breakout potential. According to the analyst, once this occurs, his next target for XRP is the $4 mark. With XRP currently trading for $2.3, it would need to rise 74% to claim $4. This price would represent a new all-time high for the asset.

Meanwhile, market expert Dom (@traderview2) is also watching the XRP/USOIL pair for a potential breakout. He suggested that XRP shows strength here despite the noise. Notably, the asset has cooled since recently hitting a range high. 

Interestingly, Dom has maintained the idea that once XRP breaks above this range high, its price will skyrocket further. According to him, this high represents the $2.47 level on the USD chart, aligning with Poseidon’s breakout mark. Dom believes any movement below this level is just noise.

Despite Bitcoin breaking records, seasoned crypto commentator Edoardo Farina argues that XRP offers far greater upside potential.

He downplayed Bitcoin’s recent surge to a new all-time high of $112,000, saying XRP remains a better-performing crypto. In a recent video, Farina claimed that Bitcoin’s rally offers little more than psychological satisfaction for most retail investors.

He asserted that the average investor doesn’t even own a whole Bitcoin. “Most people can’t afford $112K, and even a 5x from here isn’t life-changing unless you’re already wealthy,” he said.

XRP Delivers 600% Gains Quietly

While headlines focus on Bitcoin, Farina highlighted that XRP has quietly outperformed the market, delivering over 600% gains in just a few months. He pointed out that XRP traded sideways at $0.50 while Bitcoin hovered around $70K back in November 2024. Farina emphasized that those who chose BTC at that point are only up around 30%.

On the other hand, considering XRP’s current price of $2.40, the coin is up approximately 380%. At its recent peak of $3.34 before a retracement, XRP had gained 594%.

As a result, Farina suggests XRP has been a far more lucrative play for investors seeking real returns in a short time frame, despite regulatory scrutiny and mainstream skepticism.

XRP to $100 if Bitcoin Hits $500K?

Furthermore, Farina argued that the days of 50x or 100x returns via Bitcoin are long gone. He outlined a scenario in which Bitcoin reaches $500K, representing a 5x increase or roughly 355% growth from current levels.

Meanwhile, Farina pointed out that an investor could see a 10x return simply by holding Stellar (XLM) from $0.30 to $3. He also proposed a scenario where XRP rallies 4,066% from $2.40 to $100, should Bitcoin rise to $500K.

According to Farina, the risk-reward ratio doesn’t justify going all-in on BTC. In perspective, those holding 10,000 XRP worth just $24,00 would have a portfolio of $1 million. However, whether XRP can reach $100 remains a subject of serious debate in the crypto community.

The Final Word: Look Beyond the Hype

Meanwhile, Farina also questioned the sustainability of Bitcoin’s current rally. He attributes much of the price action to low liquidity and alleged artificial inflation via stablecoins like USDT.

Farina went further, calling Bitcoin “outdated technology” with “no real-world utility.” He criticized its slow transaction speeds, high fees, and inability to function as a daily currency.

He also claimed Bitcoin is not a store of value but a bait for retail investors, especially when institutions are preparing to cash out.

Instead, Farina suggests focusing on utility-driven projects like XRP, XLM, HBAR, and Algorand. He noted that financial institutions and central banks increasingly favor these technologies.

Ultimately, Farina stressed that just because Bitcoin hits a new high doesn’t mean it’s the best place to park your money. According to him, there’s nothing to celebrate unless one bought BTC at $1,000 or $5,000.

“Today, you’re better off investing in undervalued, high-utility assets like XRP. The returns are bigger, and the future is brighter,” he claimed.

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.