XRP holders are typically passionate and loyal to the project, banding together like an army of soldiers. Many moons ago, I myself was part of this army. Anyways, in this article, I’ll try to figure out if XRP can reach $1000.
XRP might reach $1000 if it becomes the chosen currency of all the major banks on earth and the circulating supply becomes deflationary, but it is highly unlikely. The market capitalization of a thousand-dollar-XRP will reach $100 Trillion, which is five times the GDP of The U.S and 25% higher than global GDP.
The problem with a thousand-dollar XRP is the huge market cap it requires. Remember Market Cap = Price * Supply.
It then logically follows that high supply tends towards a low price. There needs to be some balance.
XRP has a huge supply compared to other coins, which is the reason for its relatively low price.
It’s the same problem whit Cadano, which is why ADA will never reach $1000.
Let’s get specific, and calculate the market cap and compare it to other stuff to figure out if it’s realistic or not.
The Market Capitalization Of A $1000 XRP:
To calculate it, we need the circulating supply. According to good ol’ coinmarketcap.com, there’s roughly 46,500,000,000 XRP in circulation.
The market cap would then be a thousand times that number:
$1000 * 46.5 Billion = 46.5 Trillion USD
In other words:
If XRP reaches $1000 with its current circulating supply, the market capitalization will reach $46,500,000,000,000 (46.5 Trillion USD).
To get some perspective, check out the chart below:
As you can see, it’s more than twice the U.S. GDP… That does not sound realistic at all.
But it gets even worse…
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The Tokenomics Of XRP: (Inflation vs Deflation of Supply)
XRP is both an inflationary and a deflationary asset. The circulating supply increases every month, but the total supply decreases incrementally with every transaction due to a fee which is burned.
To be specific:
The total supply of XRP started out at 100 Billion XRP, but decreases (very) slowly. Less than 0.1% per year. The released XRP that inflates the circulating supply is currently setting an inflation rate of 6.5% as calculated from their reports.
This means that the market cap of a $1000 XRP will increase 6.5% per year it takes.
Below you see another chart showing what the market cap would be depending on what year it happens:
I think that its safe to say this is highly unlikely.
The One Thing That Might Take XRP To $1000
If Ripple becomes the base layer for international transactions, and every major bank chooses to transact using XRP, it MIGHT have some chance of reaching $1000.
However, it’s likely not enough…
We’re talking $100 Trillion market cap. That is the same as the bond market, which is one of the largest markets in the world.
It’s even bigger than the Global GDP, which is at $80 Trillion. (source)
But, if XRP becomes the standard currency to settle global transactions, and the circulating supply stops being inflated (and starts to deflate), it can be considered a possibility, but it’s highly unrealistic.
Conclusion: XRP Can’t Reach $1000
No, XRP can not reach $1000 even if it becomes the base layer of our economy and the circulating supply becomes delationary. The market cap would eventually reach close to $100 Trillion, which is more than global GDP and the same as the global bond market.