Floy Burgman lYWV
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Bullish
$XRP Stop Using Market Cap to Analyze XRP – It’s a Flawed Metric
Many still argue that XRP cannot reach high prices because its market cap would be "too large." This argument is based on a fundamental misunderstanding of XRP’s function. Unlike stocks or commodities, XRP is a transactional tool, designed to facilitate global payments, not a static asset meant for holding.
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1. Market Cap is Irrelevant for Transactional Assets
Market cap is a useful metric for stocks and Bitcoin, which are primarily used as stores of value. However, XRP is designed for real-time financial flows. Comparing XRP’s market cap to Bitcoin or a company’s valuation is like comparing the Forex market’s daily volume to a country's GDP—they measure completely different things.
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2. XRP Should Be Compared to Global Transaction Volume
Instead of using market cap, XRP should be evaluated based on global financial flows:
The global GDP is ~$100T, but the Forex market transacts ~$2,700T yearly—27× the global GDP.
Cross-border payments exceed $150T annually, a market XRP is specifically built to serve.
Market cap ignores transaction velocity—XRP can be used multiple times a day to facilitate transfers, unlike a stock that remains static in a portfolio.
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3. Every Transaction Burns XRP, Reducing Supply
Unlike fiat systems, every XRP transaction burns a small amount of XRP, gradually decreasing the total supply. As adoption increases, demand rises and supply contracts, creating a natural mechanism for price appreciation.
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Conclusion
Market cap does not determine XRP’s potential—its transactional efficiency and adoption do. If you're still using market cap to judge XRP, you're applying stock market logic to a financial flow system, which is fundamentally flawed. It’s time to move beyond outdated analysis and focus on real-world utility and adoption.
Many still argue that XRP cannot reach high prices because its market cap would be "too large." This argument is based on a fundamental misunderstanding of XRP’s function. Unlike stocks or commodities, XRP is a transactional tool, designed to facilitate global payments, not a static asset meant for holding.
---
1. Market Cap is Irrelevant for Transactional Assets
Market cap is a useful metric for stocks and Bitcoin, which are primarily used as stores of value. However, XRP is designed for real-time financial flows. Comparing XRP’s market cap to Bitcoin or a company’s valuation is like comparing the Forex market’s daily volume to a country's GDP—they measure completely different things.
---
2. XRP Should Be Compared to Global Transaction Volume
Instead of using market cap, XRP should be evaluated based on global financial flows:
The global GDP is ~$100T, but the Forex market transacts ~$2,700T yearly—27× the global GDP.
Cross-border payments exceed $150T annually, a market XRP is specifically built to serve.
Market cap ignores transaction velocity—XRP can be used multiple times a day to facilitate transfers, unlike a stock that remains static in a portfolio.
---
3. Every Transaction Burns XRP, Reducing Supply
Unlike fiat systems, every XRP transaction burns a small amount of XRP, gradually decreasing the total supply. As adoption increases, demand rises and supply contracts, creating a natural mechanism for price appreciation.
---
Conclusion
Market cap does not determine XRP’s potential—its transactional efficiency and adoption do. If you're still using market cap to judge XRP, you're applying stock market logic to a financial flow system, which is fundamentally flawed. It’s time to move beyond outdated analysis and focus on real-world utility and adoption.
Disclaimer: Includes third-party opinions. No financial advice. May include sponsored content. See T&Cs.
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