XRPL currently holds 1.1% of the token risk-weighted asset (RWA) market share valued at $26.44 billion.
The AI model indicates that the $70 billion growth in risk-weighted assets (RWA) could drive XRP to $134.5 billion by 2026.
The assumption of the current market value to risk-weighted assets (RWA) ratio of 571:1 may not align with linear growth.
The XRP Ledger currently controls only 1.1% of the real-world cryptocurrency (RWA) asset market, valued at $26.44 billion, with its risk-weighted assets (RWA) amounting to $302.4 million, according to RWA.xyz data.
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With XRP holding a market capitalization of $172.6 billion, analysts wonder whether an increase in XRP's market share of its risk-weighted assets (RWA) will lead to a significant rise in its price.
Google Gemini's analysis will reveal the potential impacts on the price of XRP should Ledger capture 20% of its risk-weighted asset (RWA) market by 2026. The AI model recognized several unknowns that make accurate forecasting impossible, particularly regarding future growth rates of its risk-weighted asset (RWA) market and adoption patterns.
The hypothetical expansion yields tremendous valuation expectations.
Gemini projected an overall growth in the risk-weighted asset (RWA) market to $70 billion by 2026, giving XRPL a market share of $14 billion under a 20% acquisition scenario. Using the current market value ratio of XRP, which stands at 571:1, to exposure to risk-weighted assets (RWA) as a baseline, the analysis indicates the potential for market capitalization to expand to nearly $8 trillion.
Dividing this theoretical market capitalization of $8 trillion by the circulating supply of XRP tokens, which is 59.41 billion, yields an expected price of $134.5 per token. This calculation assumes the current relationship between exposure to risk-weighted assets (RWA) and market valuation remains constant as adoption grows.
The model confirmed that these projections depend on very simplified assumptions about the linear growth relationships between the price of XRP and the market share of risk-weighted assets (RWA) in the token. Real-world dynamics are likely to differ from these mathematical extrapolations.
Linear growth assumptions face practical limitations.
Gemini highlighted that the recent increase in the value of XRPL to $302 million in risk-weighted assets (RWA) did not have a noticeable effect on the price of XRP, raising questions about whether larger increases would generate proportional market responses. The variance between the growth of risk-weighted assets (RWA) and price movement suggests other factors affecting XRP valuations beyond exposure to token assets.
The ratio of 571:1 between market value and risk-weighted asset (RWA) value may not develop linearly with increasing adoption, especially considering the speculative nature of cryptocurrency markets compared to the values of underlying assets. Improvements in market efficiency may reduce this ratio as institutional adoption matures.
Ripple's focus on custody infrastructure as an institutional gateway supports the growth potential of risk-weighted assets (RWA), although actual adoption rates remain uncertain. The company considers suitable custody solutions as essential for regulatory compliance and risk management in token asset markets.