Don't Misunderstand $XRP: Market Cap Is Not the Sole Measure of Value

In the world of cryptocurrency, there are many opinions that XRP cannot reach a high price due to its "market cap being too large." However, this perspective does not apply to XRP as it does to stocks or Bitcoin. In fact, XRP is designed to serve global transactions - a completely different purpose from a store of value asset. This article will explore with you the reasons why market cap is not a suitable indicator to evaluate XRP and the factors that truly determine its value.

1. Market Cap Does Not Reflect the True Value of XRP a. Concept of Market Cap and Its Limit Definition: Market cap is calculated by multiplying the price of the currency by the total circulating supply. For stocks and Bitcoin, this number is often seen as a measure of the 'size' and value of the asset. Limitation: While market cap helps assess the value stored in assets, it does not fully reflect the utility of assets designed for daily transactions. b. XRP - A Utility Asset for Global Transactions Different use cases: XRP is not just a currency for investment or storing value, but also a global payment tool that facilitates fast and low-cost cross-border transfers. Unreasonable comparison: Comparing the market cap of XRP with Bitcoin or stocks is like comparing the GDP of a country with the daily trading volume in the forex market - two completely different measurement indices.
2. The Real Value of XRP is Measured by Trading Volume a. The Power of Global Transactions Huge trading volume: The annual trading volume on the Forex market exceeds 2,700 trillion USD, while cross-border payments exceed 150 trillion USD per year. This demonstrates the significant demand and real value of the global payment system. Continuous trading feature: XRP is used multiple times a day, creating a huge trading volume. The real value of this currency lies in its ability to connect and promote financial transactions globally, not just measured by the total market value. b. The Difference Between XRP And Other Assets Utility: XRP is designed to facilitate fast, secure, and cost-effective transactions. This sets it apart from currencies or stocks that are valued solely for their store of value. Real-world application: When a transaction is made, XRP not only transfers value but also serves as evidence of the ability to support large-scale financial operations worldwide.
3. Supply Reduction Mechanism through Transactions - A Factor Driving Value a. XRP 'Burning' Mechanism Natural process: Each XRP transaction is accompanied by a small amount of currency being 'burned'. Over time, this mechanism helps reduce the total circulating supply of XRP. Supply and demand impact: As the demand for XRP increases and the supply narrows over time, natural upward price pressure will emerge. This is the fundamental economic factor that many investors need to consider. b. Economic Consequences of the Combustion Mechanism Increasing value over time: When the supply decreases but demand increases, the value of XRP can increase in a way that is not limited by traditional market cap-based analysis. Attractiveness for investors: The decreasing supply mechanism increases the value of each XRP unit, creating a special attraction for investors looking for an advantage from the scarcity effect.
4. Real Question: How Much Global Financial Value Will XRP Control? Instead of asking "Can XRP reach the price of $X?", what matters is: Application scope: What percentage will XRP become an indispensable part of the global payment system? Explosive potential: If XRP truly becomes the backbone of international transactions, its value may far exceed the initial predictions of many people. XRP is not just a cryptocurrency, but a global connectivity tool that can change the way financial transactions are conducted today. Conclusion Applying the logic of the stock market to evaluate XRP is a serious mistake. XRP should not be evaluated based on market cap, but rather on: Trading volume and utility: XRP's true strength lies in its ability to drive global financial transactions. Supply reduction mechanism: Burning XRP through each transaction reduces the total supply and increases in value over time. Potential for wide application: The question is not "how much price can XRP reach?" but rather "how much part of the global financial system will XRP control?" As the world is shifting towards faster, cheaper, and more efficient payment methods, XRP is the key to this revolution. What do you think about the potential of XRP? Is it being undervalued? Let's discuss and share your thoughts in the comments section.