XRP Price Must Rise to Facilitate Large-Scale Transactions, Says Ripple CTO
1min read Brett, a prominent cryptocurrency expert on X, recently highlighted past statements made by Ripple CTO David Schwartz to support the long-standing belief within the XRP community that the token cannot remain at a low price if it is to fulfill its intended utility at scale.
In a post on X, Brett referenced Schwartz’s explanation of why higher XRP prices are necessary for large-scale value transfers. He stated, “This is why $XRP can’t be cheap. $10,000 is imminent,” emphasizing the importance of a higher XRP price to support efficient transactions.
Schwartz explained that with a higher XRP price, fewer tokens are needed to move the same transaction amount. For instance, transferring 1 billion US dollars would require a different number of XRP tokens depending on the price per token. If XRP costs $1, a million XRP tokens would be needed, costing $1 million. If XRP costs $1 million, only one token would be required, again costing $1 million. This logic underscores the necessity for the price per XRP to rise to efficiently facilitate high-value transactions, particularly those involving institutional-scale cross-border payments.
Schwartz also discussed how market dynamics support this pricing logic. He noted that higher prices make payments cheaper, using Bitcoin’s price evolution as an example. When Bitcoin was priced at $300, attempting to buy a million-dollar house would require moving a large number of tokens, which would be impractical due to market slippage. At higher prices, fewer tokens are needed, reducing market slippage and making transactions more manageable.
Schwartz further clarified how XRP transactions with institutions are handled. He noted that institutional sales of XRP are managed on a case-by-case basis and typically come with lockups, meaning they do not directly affect the public market. This distinction adds to XRP’s appeal, as institutions show significant interest in the token. The broader implication is that XRP’s price must be sufficiently high to support its utility as a bridge asset for large-scale transfers.
As XRP is used to facilitate liquidity between fiat pairs, a low price would require excessive volume to settle large sums, creating practical limitations on the asset’s utility. While XRP has faced challenges recently, the logic presented by Schwartz continues to shape investor expectations. The premise is clear: if XRP is to be used to settle transfers of billions of dollars, the token’s price must be high enough to make it possible without disrupting markets.
