XRP News: Ripple's 1,700 Bank Transactions Could Send Prices Soaring. Here's Why!
XRP News Post: Ripple's 1,700 Banking Agreements Could Send Prices Soaring!
Here's why!
is critical as the bulls are fiercely defending the critical support at $0.5785, which sets the stage for a possible breakout. With the price consolidating and targeting the key resistance levels at $0.5920 and $0.600, the question is:
Will the bulls take control and push XRP higher, or is another drop looming?
This battle for control could define XRP’s next big move, with significant upside potential if key levels are breached.
There has been a lot of talk on X about the price of XRP and whether or not it will increase in price. Let me give you some insight into what will happen when banks use XRP to settle large transactions on a daily basis. Here is how I see this playing out in the future... — CryptoTank (@Tank2033js) September 23, 2024
Analysts' opinion on the price of XRP
Cryptocurrency analyst CryptoTank shared a detailed thread on the essential factors that will drive the price of XRP in the future, focusing on its utility in settling large-scale transactions between financial institutions.
According to CryptoTank, to understand the price of XRP, it is crucial to distinguish between market cap and utility. The value of utility assets like XRP is calculated by the value and volume traded on the ledger, divided by the circulating supply.
This differs from conventional market cap metrics and means that XRP’s price is inherently tied to its use by institutions, not retail investors.
Deep liquidity is key for banks
CryptoTank highlights that banks using XRP for settlements must have deep liquidity. Institutions like Bank of America, SBI, JP Morgan, and Swift settle a staggering $25-30 trillion daily. Even if only 10% of these transactions are done using XRP, that's about $3 trillion on the ledger, requiring an even larger liquidity pool (likely double the transaction amount) to prevent potential failures.
The need for such deep liquidity arises from banks’ inability to cope with transaction failure. A failed transaction can lead to costly delays and complications. Liquidity pools must therefore be robust enough to ensure smooth settlements, and this demand will be crucial to boosting XRP’s utility and, consequently, its price.
Ripple's expanding network
Ripple’s influence is not limited to a few banks; the firm has over 1,700 undisclosed agreements (NDAs), potentially amplifying XRP’s demand and liquidity needs. CryptoTank emphasizes that the figures given are just examples of a few key players, and when the full scope of these institutions is considered, the liquidity requirements (and therefore the value of XRP) could be even more massive. One of the most notable points is that retail investors have little to no influence on the price of XRP.
The price will not rise based on retail buying pressure because retail activity pales in comparison to the daily settlement needs of large institutions. Similarly, chart analysis, which many traders rely on, is ineffective in predicting XRP price movements because it cannot take into account the utility and liquidity requirements that will ultimately determine the value of the token.