The price of $XRP could rise.
to unimaginable levels if the utility of the asset in payments grew to allow it to cover 25% of global financial transactions.
While $XRP may not reach new all-time highs recently, most community members still see enormous potential in it. Specifically, proponents argue that the token is undervalued, especially considering its real-world use in payments.
#XRP is characterized by enormous utility in payments.
As the payment infrastructure in #Ripple continues to grow, so does the belief that the utility of XRP could eventually drive its price much higher. However, it is important to understand the scale of the global financial landscape in order to confirm how high XRP's price could go if it captures a significant share.
Notably, in 2023, a report by Telegeography indicated that estimates suggest the total global financial transactions amount to around $10 trillion every day. The report also hinted that the actual figure could be even higher. However, for practical purposes, most estimates still use the $10 trillion mark.
With that in mind, we asked ChatGPT what might happen if XRP handled 25% of those global transactions, or about $2.5 trillion daily. At that time, XRP was trading at $2.16, with a circulating supply of 58.88 billion, and a market cap of $127.6 billion. The daily trading volume was about $2.738 billion.
Price $XRP if it handles 25% of global transactions.
In response, ChatGPT provided several ways to evaluate the price of XRP using these figures. In the first approach, it looked at what would happen if the price of XRP rose proportionally with its transaction volume.
Since the current price reflects a daily trading volume of about $2.7 billion, raising this figure to $2.5 trillion would put the price of XRP at around $1,972.50. Notably, this estimate assumes a linear relationship between price and usage. However, this does not always hold true in actual markets.
Next, ChatGPT used the network value to transactions (NVT) ratio, a metric similar to the price-to-earnings ratio in stock markets. Assuming XRP became a major settlement asset and maintained an effective network value ratio of 20, its market cap would rise to $50 trillion.
Dividing that by the current supply, the price comes to about $849.38. Interestingly, a low network value ratio of 10 indicates a price close to $424.69, while a higher network value ratio of 40 would push it closer to $1,698.75.
Meanwhile, in its third approach, ChatGPT assessed how XRP functions as a bridge currency. This model specifically focuses on liquidity, indicating how much value XRP needs to move each day.
If each token were traded just once a day, it would need to carry $2.5 trillion in total, putting its value at about $42.47. If XRP moved ten times a day, the price would drop to around $4.25. At twenty transactions per day, the price would stabilize near $2.12, which is close to where it is currently trading.
