Cryptocurrency analysts have recently started making outstanding price predictions for the native token of the XRP Ledger, $XRP, after a major player in the cryptocurrency’s ecosystem, Ripple, joined the International Swaps and Derivatives Association (ISDA).
A recent tweet from a popular analyst going by Digital Perspectives on the microblogging platform X (formerly known as Twitter), highlighted a provocative XRP price prediction suggesting the cryptocurrency’s price could skyrocket to $1,896 per token.
An explanatory breakdown by another community aficionado unveiled the mathematics driving this optimistic outlook. The prediction was based on XRP’s market capitalization and it potentially capturing 10% of the derivatives market, which is estimated at a colossal $1 quadrillion.
The community member then noted that 10% of that colossal market would be equivalent to $100 trillion, and said that if “XRP processes $100 trillion, and its current market cap is $34.9 billion, then the market cap of XRP would need to increase by approximately 2,865 times.”
Multiplying XRP’s price by that figure, the analysis arrived at the $1,896 per token. Many in the community, however, criticized the price prediction. One user highlighted the implausibility of the assumption that derivative transactions would concurrently utilize XRP’s entire circulating supply
While some members of the community remained optimistic, others noted that there’s a myriad of variables at play when it comes to the cryptocurrency’s price, meaning such a prediction is unlikely to materialize.
As CryptoGlobe reported, XRP has seen its market capitalization drop by nearly $10 billion from its peak this year, which was seen shortly after Judge Analisa Torres ruled the cryptocurrency isn’t necessarily a security.
XRP’s price decline is likely a result of recent criticism from U.S. District Judge Jed Rakoff of the Southern District of New York, which contested Judge Torres’ differentiation between institutional sales and sales to retail investors on cryptocurrency exchanges.
Rakoff characterized this as a flawed interpretation of the Howey test, which is commonly utilized to ascertain if an asset classifies as a security, according to analysts headed by Mark Palmer.
The discord generated by Rakoff’s rejection could potentially convolute the acknowledgment of popular crypto exchange Coinbase of the initial ruling in its own ongoing legal battle with the SEC, according to Berengerg analysts, who said Judge Rackoff explicitly referenced Judge Torres’ ruling in his own, saying that the Howey Test does not differentiate between buyers.
XRP was relisted on a number of cryptocurrency exchanges after Judge Torres’ ruling, including on Kraken, Coinbase, and Gemini, which helped its liquidity surge.
Featured image via Pixabay.