Introduction
Now that XRP has won their case against the SEC, can it finally become the backbone of the global financial system, like many fans claim? What are the biggest catalysts coming to XRP in the next bull run, and how high can XRP's price go in the next few years XRP has undoubtedly been one of the most resilient cryptos in the entire industry, and throughout its lifespan, it has had a fanatic fan base but also major controversies like its centralization problems. But now with the court's ruling behind us, I think the fundamentals of XRP are at a great spot to flourish in the next cycle.So let's set the record straight with an unbiased analysis on the future of XRP. I will dive into the effects of XRP's win over the SEC, the latest technology adoption of XRP, the tokenomics and centralization worries, and also give you my price prediction for XRP by the year 2025.
XRP vs The SEC
The XRP lawsuit was the biggest lawsuit in the history of crypto, one that the entire industry had been keeping an eye on since the end of 2020. This lawsuit wasn't just impacting XRP but the entire industry because the SEC is trying to use this case as a legal framework to classify all cryptos other than Bitcoin as a security.Gary Gensler has compared crypto to the wild west that's riddled with scams and claims he's trying to gain control over crypto to protect the average investor. But many will argue that the SEC doesn't actually care about the average investor at all. Instead, they're just trying to take power from the crypto industry and give it to their friends in the government and on Wall Street.Perhaps the worst part about the SEC is that they've tried to enforce legislation through litigation and sue different crypto projects for violating security laws even though they never provided guidance in the first place. That's why this win was such a big deal for XRP going into the next cycle.The judge ruled in favor of XRP and concluded that XRP tokens listed on exchanges for trading weren't considered an investment contract and therefore weren't a security. The judge stated that XRP token itself is not a security but rather a digital token. This makes XRP one of the only few cryptos that has clearly received regulatory guidance, the only other two being Bitcoin and Ethereum.Keep in mind that the lawsuit wasn't a complete win for Ripple. The judge did rule that XRP violated securities laws by selling XRP to their institutional investors. This means that even though the XRP token itself is safe, Ripple could be on the hook to pay back as much as $700 million in sales proceeds. So while the ruling is favorable for XRP, this case will still be playing out in court for the foreseeable future.
FedNOW and Payments
Countries will need a fundamental payments network like FedNow to connect their financial institutions in the US. Most banks and payment providers are expected to support FedNow in the next couple of years. This will make all transactions settle instantly, 24/7. In China, this is dominated by WeChat and Alipay, two payment apps that almost every Chinese person uses, and these are directly connected to their bank accounts. It's clear that across the globe, people are no longer happy with having to wait three days for a bank transfer to arrive, so many more countries will shift to an instant settlement network over the next few years.This is the first area in which Ripple and XRP can see adoption. It's a battle-tested solution that is easy to adopt for any financial institution, and it has the same benefits like cost savings, instant settlement, and 24/7, 365-days-a-year availability.
Can XRP Stay Neutral?
Potential pushback against Central Bank Digital Currencies (CBDCs): If any country does not want to adopt a CBDC and track all their citizens, it gives them even more reason to adopt a blockchain-based system like XRP. This would allow them to maintain the sovereignty of their money while still upgrading to an instant settlement network.Progressive countries will need a transparent payment network that can support both existing financial institutions at scale and tokenize hard assets like Bitcoin and gold. The XRP Ledger could be used to create a good compromise between CBDCs and a user-owned currency.Consider the power dynamic that these payment rails will have in the world. Nations that heavily rely on the US dollar for trade might onboard to a FedNow-like system. Similarly, friendly countries of China and users of the UN might want to adopt Chinese payment apps. The EU will obviously have something of its own. This will form clusters of payment networks with their own dominant CBDCs.Other nations left out of the mix will need to adopt a more neutral and global system, and there is nothing more neutral than a decentralized blockchain network like the XRP Ledger that can support any asset.While there was skepticism about Ripple and XRP being used in bank payments and issuing national currencies in the past, the landscape has changed in 2023 and beyond. It is now a race to get ahead in the global financial reset. Banks, currencies, and even card payments are quickly going out of fashion, and XRP presents an attractive solution. It is natively built for bank settlements, digital payments, and CBDCs, and it is much more decentralized and neutral than state-backed networks like FedNow.Superpowers like the US, China, and the EU may not migrate to XRP, but it wouldn't be surprising to see at least a handful of smaller nations connect their banks to XRP and issue CBDCs on it by the year 2025. The Republic of Palau and Colombia have already started pilot programs using XRP for their CBDCs.
XRP Tokenomics
Tokenomics of XRP are crucial to understanding its potential. The token supply for XRP is capped at 100 billion, with all tokens pre-mined in 2012. Ripple Labs had the discretion to distribute these tokens. Currently, there are 53 billion XRP tokens in the circulating supply, with 5.5% held by Ripple Labs, and 41.9% held in an escrow account, which is also controlled by Ripple.
Concerns have arisen because of this large supply controlled by Ripple, as there's fear it could be unlocked and sold, potentially affecting the market. However, Ripple has demonstrated a strong commitment to not sell their tokens. They implemented an escrow account in 2018 to control the release of Ripple's share of XRP tokens. Only a small portion can be released each month, with the original goal of emptying the escrow account by July 2022. However, Ripple has relocked a significant percentage of unlocked XRP each month, meaning only 200 to 300 million tokens are entering the market monthly.
The challenge lies in the unpredictability of how much XRP Ripple chooses to unlock each month. Transparency reports exist, but the actual numbers can vary. It could increase to 1 billion per month or decrease to zero, depending on Ripple's choices. As long as there's a clear tokenomics plan showing that the supply will release over a long 10-year timeframe, XRP may gain value and eliminate uncertainty around potential supply increases.
For comprehensive information on token distribution and the release schedule, tools like CoinGecko and Token Unlocks are useful.
XRP Price Prediction
Conservative Target:
In a conservative scenario, assuming XRP achieves a new all-time high, I estimate a market cap of $260 billion. With a circulating supply of 57.4 billion XRP, this results in a lower price prediction of approximately $4.50 per XRP.
Optimistic Target:
In a more optimistic scenario where Ripple continues to invest in the success of the XRP token and it achieves a market cap similar to Visa (valued at $500 billion), XRP could reach an upper price target of around $9 per coin.
I believe XRP will make a new all-time high in the next bull run. XRP has gone through several years of bear markets and challenges, including the SEC lawsuit. These factors have set the stage for a potential major comeback in the next cycle.
However, if Ripple decides to IPO, it may have a different impact on the XRP token, as investor interest and company resources could be split between two public markets. In such a case, price targets might be adjusted accordingly.
I do not believe XRP will reach $100 or more, as this would imply a total market cap of $10 trillion, which is significantly higher than even the largest companies in the world, such as Apple. Unless Ripple takes significant steps to decentralize the token supply, such a high valuation seems unlikely.