A simple yet crucial factor, the lack of significant new money net inflow, is responsible for the current price of Ripple (XRP). According to Chad Steingraber, an artist and an analyst, the price of XRP is not being driven up due to insufficient fresh capital entering the market.
Utility: A Net Neutral Attribute (For Now)
Steingraber argues that utility, as of today, is a net neutral attribute when it comes to XRP’s price. This means that the current level of utility is not directly contributing to an increase in price. However, the analyst suggests that this will change in the future.
In the absence of a new net inflow, XRP’s price relies on existing crypto market money moving from other assets into XRP. This typically occurs when fear of missing out (FOMO) kicks in, and investors chase green candles. If this dynamic remains net neutral indefinitely, XRP’s price would never appreciate.
Cryptocurrencies vs. Stocks: Different Valuation Mechanisms
Understanding that cryptocurrencies like XRP are not stocks and do not have an underlying cash flow that charts can track to naturally increase their price is essential.
Market sentiment and adoption primarily drive the value of cryptocurrencies, unlike stocks, which can be based on financial metrics and company performance.
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Show more +Show less – Two Key Factors for Short-Term Price Appreciation
Steingraber identifies two crucial factors that need to occur in the short term for XRP’s price to rise:
Reduction of Public Supply from Exchanges: As more institutions begin to utilize XRP for its utility, the demand for the token will increase. This increased demand will lead to XRP being taken out of public exchanges and held in private liquidity hubs, reducing the available supply in the market.
New Money Entering XRP: Any method that brings new money into the XRP ecosystem will contribute to price appreciation. An ideal scenario would be the approval of an XRP solo spot exchange-traded fund (ETF). However, even the introduction of Bitcoin (BTC) ETFs can indirectly benefit XRP, as BTC holders may sell profits and rotate into altcoins like XRP.
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The Path Forward: 2025 and Beyond
Steingraber believes that these short-term goals will drive XRP’s price through 2025 in the current bull run that is just beginning. The analyst suggests that the period from 2026 to 2030 represents a new frontier for XRP and the broader cryptocurrency market.
As utility continues to grow and new investment vehicles emerge, the demand for XRP is expected to increase, leading to a reduction in public supply and an influx of new money. These factors, combined with the overall growth and maturation of the cryptocurrency market, could potentially drive price appreciation for XRP in the coming years.
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