- Ripple’s XRP’s association with ISDA fuels a soaring $1,896 price prediction.
- Critics question the prediction’s basis, pointing to the massive market cap required and the unrealistic need for XRP’s entire circulating supply in derivative transactions.
Unpacking the Lofty Price Prediction
The tempestuous world of cryptocurrencies is known for its audacious forecasts, with the most recent one placing Ripple’s XRP at an eye-popping $1,896. This bold prediction arises primarily from Ripple’s newfound collaboration with the International Swaps and Derivatives Association (ISDA). However, as tantalizing as it might sound, diving deeper into its foundation reveals some questionable assumptions.
Bradley Kimes of Digital Perspectives set the crypto community abuzz with his projection, emphasizing that Ripple’s alliance with ISDA could lead to mainstream acceptance, potentially pushing XRP to the stated $1,896 mark. The conjecture originates from game theory, hypothesizing XRP could commandeer a staggering 10% of the derivatives market. By some estimates, this market hovers around a gargantuan $1 quadrillion. Therefore, to achieve this hypothetical price, XRP would need to handle an impressive $100 trillion, elevating its market cap by an astounding 2,865 times.
Yet, several crypto aficionados find this assertion overly optimistic. Critics primarily spotlight the improbable scenario where the entirety of XRP’s circulating supply would be utilized simultaneously for derivative transactions. Crypto analyst John Aldinio rebuts the calculation, terming it a “useless exercise.” The practical execution of such an aspiration presents a labyrinth of challenges given the multifaceted elements influencing cryptocurrency valuations.
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Navigating Through XRP’s Legal Storm
Further complicating XRP’s journey is its ongoing legal saga. The digital coin experienced a $10 billion shrinkage in its market cap, primarily stemming from Judge Analisa Torres’ ambiguous verdict on XRP’s status as a security. This indecision threw a wrench into XRP’s valuation track and affected the course of prominent crypto exchange Coinbase in its legal duel with the SEC.
Judge Jed Rakoff’s interpretation of the Howey test, a crucial determinant for categorizing assets as securities, sharply diverges from Judge Torres’ standpoint. Such legal uncertainty caused prominent exchanges like Kraken, Coinbase, and Gemini to re-evaluate their XRP listings, previously a significant driver of its liquidity.
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