In the world of cryptocurrency, asset pricing sometimes feels like 'putting a stethoscope to the sky to hear the weather.' However, for some coins, there is a steadier pulse to monitor – that is the value derived from increased utility and growing trust.

Assets that are increasingly useful to major financial institutions, and are trusted more by their risk management teams, will often have higher and more sustainable valuations over time. XRP (CRYPTO: XRP) is a prime example of this path.

In the past three years, the price of XRP has increased by approximately 700%, reaching over $3 on August 18. The question arises: Is this coin being overvalued? To answer, let's analyze the key drivers behind the value of XRP.

Ripple – the company behind XRP – has demonstrated its ability to build strong relationships with both regulators and financial institutions.

  • Legal issues: In early August 2024, the U.S. Securities and Exchange Commission (SEC) officially closed a multi-year lawsuit against Ripple, related to allegations of issuing unregistered securities. This is a major turning point, removing the 'legal cloud' that had previously overshadowed Ripple's core operations. While many other crypto projects still face the risk of similar lawsuits, Ripple has escaped this vortex.

  • Global legal expansion: Ripple is also very proactive in building trust with international regulators. In Singapore, Ripple's subsidiary has received a Major Payment Institution license from the Monetary Authority of Singapore (MAS) since 2023 – an important testament to its credibility. Additionally, Ripple has made its mark in Dubai, where XRP was chosen for a real estate tokenization project for the city.

  • Penetrating traditional finance: Ripple acquired Metaco in 2023 – a digital asset custody service provider for major banks. By mid-2024, Ripple continued to acquire Standard Custody, enabling the company to hold a special purpose trust license – a type of license that traditional financial institutions often prioritize when partnering with digital asset service providers.

All these moves help Ripple no longer rely on 'marketing stories,' but instead on a solid, rare, and hard-to-build foundation. This makes XRP less likely to be overvalued.

2. Not Too Many 'Bubbles' to Worry About

Financial institutions entering the cryptocurrency market usually focus on three factors:

  1. Legal compliance money transfer systems

  2. Transparent, secure asset control processes

  3. Integration of low-barrier technology

The XRP Ledger (XRPL) has met these demands with compliance features built right into the protocol level, rather than relying on complex intermediary layers. This minimizes friction in the integration process into the organization's systems. Compared to competitors, XRPL has a clear advantage.

However, XRP also faces increasing competition from other blockchains, especially those with richer DeFi ecosystems. But it should be emphasized that the investment thesis for XRP is not that it needs to become the 'one-size-fits-all' chain for all users.

Instead, the core value of XRP comes from:

  • Continuous risk reduction in the eyes of regulators and financial institutions.

  • The process of developing stable and sustainable technology.

  • The abundant liquidity that XRP brings to the market.

In other words, the valuation of XRP is not based on flashy promises, but on the hard-earned achievements that have been made, along with the critical resources Ripple holds.

3. Future Pricing of $XRP

If Ripple continues to maintain:

  • Clarity in the legal framework

  • Strong relationships with regulators

  • Reliability from financial institutions

  • Increasing number of practical integrations

then XRP is certainly not seen as being overvalued. On the contrary, it may have much room for growth thanks to its solid foundation and increasing trust.

👉 In summary, XRP is proving its value not only through price appreciation but through a mechanism of building long-term trust with the most important participants in the global financial market. This is the factor that helps this coin become more sustainable in its future development journey.