The evidence is in its design.
5 min read · Feb 18, 2019
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When XRP was created, it was designed to be a replacement for both institutional and retail financial systems in every market around the world. How do we know this? An examination of how XRP is constructed makes this evident.
A somewhat famous quote from Ripple Labs co-founder Arthur Britto provides a tantalizing clue. In 2017, he wrote, “XRP must be scalable to accommodate 7.5 billion people.” We’ll come back to this quote, but it does provide insight into the scale of Ripple’s ambitions to be used by the global population. First, let’s examine some of the main features of XRP that support my claim that it was designed to carry $10,000 of value.
Liquidity and Availability:
XRP’s primary use case is to enable cross-border payments that are faster, cheaper, and more reliable than existing systems, such as SWIFT. On Ripple’s own Insights blog, Shanna Leonard explained how “XRP is the only digital asset specifically designed for financial institutions and payment providers … (by providing them with) a reliable, on-demand source of liquidity for cross-border payments.”
According to Investopedia, “Liquidity describes the degree to which an asset or security can be quickly bought or sold in the market without affecting the asset’s price.” What we see in today’s market is price volatility as a relatively small number of investors buy and sell XRP on the exchanges. Liquidity for XRP or any crypto comes as the price rises. Higher prices equal higher liquidity.
The fact that Ripple Labs locked up some 55% of total XRP in timed-release escrow accounts, and has been disciplined in relocking the unsold portions of each release will help to eventually drive the price up. Although institutional partners are likely buying XRP over the counter from these releases, this is not reflected in the published exchange prices. At the time of writing, XRP is available on exchanges for about $0.31, which has been relatively consistent throughout the past year, as prices across the entire crypto market have been depressed.
In the previous six months, XRP’s price has ranged from $0.25-$0.60, which represents a 120% range either side of the median. Even though this is a massive…
