Ripple's RLUSD Stablecoin: Why It Might Cost More Than $1 Initially

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Ripple's highly anticipated stablecoin RLUSD is set to launch in 2024, and the crypto community is excited about it. As the launch date approaches, people's expectations are growing, especially in the XRP community. While many are eager to get their hands on the new stablecoin, Ripple's CTO David Schwartz shared some important advice for potential buyers.

Why RLUSD Might Cost More Than $1 Initially

A key point Schwartz made is that the RLUSD stablecoin may experience a temporary price surge when it is first launched. This is because in the early stages, there may be a shortage of supply. Some buyers may be willing to pay more than the expected $1 value, especially if they want to be among the first to own RLUSD. For example, in early trading, the price of RLUSD was 511 XRP, which is equivalent to $1,231 - well above the $1 target.

Schwartz explained that this price surge is not a sign of long-term value, but rather a temporary situation. When a new asset is launched, especially a stablecoin, there may be an imbalance between supply and demand, which can cause price fluctuations. These spikes are not uncommon, but they should not be mistaken for opportunities to make profits. Schwartz assured that once the market stabilizes, the price will return to $1.

Analysts Warn of FOMO Possibility

Ripple’s CTO strongly advises against buying RLUSD due to the fear of missing out (FOMO). He stressed that the main purpose of the stablecoin is to maintain a stable value of $1, and any price movement above this level could be due to supply issues or short-term demand. Schwartz warned that if someone is willing to spend a large sum of money to buy a small portion of RLUSD in the early days, they should not expect to profit from it.

He also mentioned that traders taking profits (taking advantage of price differences in different markets) will quickly help correct any price differences and bring RLUSD back to its expected price point of $1.

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