Can Ripple (XRP) hit $10 in 2022?

Can Ripple (XRP) hit $10 in 2022?

Ripple (XRP) has made headlines for a lawsuit with the Securities and Exchange Commision regarding the classification of Ripple as a security rather than a cryptocurrency. The announcement of the lawsuit at the end of 2020 caused the price of Ripple to plummet. 

It has since recovered because the SEC’s lawsuit against Ripple is not the strongest. This has led many to speculate that the price of XRP could increase in 2022 when the lawsuit is expected to conclude. 

In our opinion, XRP at $10 seems extremely improbable in 2022. However, 2021 has seen many meme cryptocurrencies (DOGE, SHIB, etc.) surge in value based on speculation alone. 

With that in mind, this article will make a case for XRP hitting $10 in 2022 and a case against it happening. We will say that XRP reaching $10 in 2022 is certainly on the improbable side, but it remains a possibility given the craziness of the cryptocurrency market. 

The Case Against XRP Hitting $10 in 2022

As we mentioned earlier, the chance of XRP hitting $10 in 2022 is improbable. 

It’s not only improbable – it’s borderline impossible for it to occur barring some sort of massive market shift or hyperinflation of the United States Dollar. 

Here’s why it’s so unlikely that XRP will hit $10 in 2022.

XRP’s Market Cap Would 10x

The first thing one has to consider when making price predictions is the market cap of the coin. That is the best way to measure the success of the coin because it accounts for the minting of extra coins.  

Anyway, XRP has a current market cap of $50 billion, which ranks it the seventh largest cryptocurrency by market cap. 

That is a fairly respectable market cap for a cryptocurrency. However, a 10x increase in market cap (XRP currently trades at $1) would give it the equivalent market cap of Ethereum. 

Note: A $500 billion market cap is only half of Bitcoin’s current market cap.

It’s possible for this to happen, but it is not something that we would count on occurring anytime soon. A 10x reason in market cap is a regular occurrence at smaller amounts (ie. Doge or Shiba Inu), but it’s incredibly rare for a cryptocurrency (or any asset) to increase 10x when it’s already in the top 10 of its class. 

Institutions Prefer Bitcoin

This point relates more to intangibles rather than solid metrics, but the general point still applies. Bitcoin is preferred by institutions, whales, and retail investors when compared to XRP. 

We know that banks use XRP for international transfers. However, that is a little different than the corporations investing in XRP. 

Bitcoin has the advantage because corporations, and now countries, hold the cryptocurrency. The reason for this is rather simple – Bitcoin is the best store of value. No one wants to hold fiat currency due to increased inflation after the COVID-19 pandemic. Bonds, once considered the best place for corporations to park cash, now pay less than the inflation rate. 

Corporations, high net worth individuals, and average retail investors have finally figured out the best way to hedge against inflation is not with bonds, XRP, gold, or other assets once deemed safe. 

It’s with Bitcoin. 

This trend will likely continue into the future. And that’s important for XRP because a lot of the liquidity in the cryptocurrency market is in Bitcoin. 

Something cataclysmic must happen for the liquidity to exit Bitcoin. Even if a cataclysmic event happens to Bitcoin, the liquidity will likely flow into Ethereum before it flows into XRP. 

The Lawsuit Is Still a Problem

Finally, the lawsuit for XRP will need to be resolved at some point. The price will not experience any significant rise until that lawsuit gets handled. 

Investors do not like to invest when there is a lot of uncertainty in the marketplace. 

The good news for XRP is that the lawsuit will likely get resolved in the near future. More importantly to Ripple is that the lawsuit will likely go in their favor.

The lawsuit is not stopping XRP from hitting $10. It does not help having such uncertainty looming over the cryptocurrency, but there are far bigger problems in the way of $10 XRP.

The Case For XRP Hitting $10 in 2022

The case for XRP hitting $10 in 2022 is very weak. In fact, there are not any logical arguments for why XRP could hit $10 in 2022. 

The basics of the argument comes down to, “If Shiba Inu Coin went up 90,000,000% in a year, XRP can do it.” 

Shiba Inu Coin

This is the only real argument for XRP hitting $10 in 2022. Again, this has to do with the fact that Shiba Inu Coin went up over 90,000,000% in 2021. 

People see that and think those gains can happen to any cryptocurrency. 

Sure, it is possible for those gains to happen when a coin goes from a market cap in the hundreds of thousands to billions. However, going from a $50 billion market cap to a $500 billion market cap is a little harder. 

Shiba Inu Coin is also essentially a gambling token that people purchase with the hope that it increases in value. XRP falls into a different category altogether because it actually has some utility, which hurts its chances of experiencing a huge pump.

Hyperinflation Devalues $10

The other possibility for XRP hitting $10 in 2022 is a lot more realistic. The argument basically goes that the United States Dollar experiences so much inflation that products that would have cost $1 in 2021 will cost $10 in 2022. 

The United States will likely not experience that much inflation in 2022, but it certainly remains a possibility given the unprecedented amount of money printing beginning in 2020. 

With that in mind, a better way to value cryptocurrency is by valuing it in Bitcoin rather than fiat currency. Fiat currency inflates every year and is not a good metric because, well, you are not going to invest money into Bitcoin. 

Valuing cryptocurrency in Bitcoin allows you to compare to the benchmark cryptocurrency. If the value goes up compared to Bitcoin, then that is good because you are beating Bitcoin. If the value goes down, then that is bad because your investment lost value and you could have had more growth if invested in Bitcoin. 

It’s a simple concept, yet it is one that many people ignore because it’s more intuitive to value in USD. 

Final Thoughts

That covers it for whether or not XRP will hit $10 in 2022. 

No, XRP will not hit $10 in 2022. The market cap at $10 would be around $500 billion, which is the same as Ethereum’s current market cap. A 10x increase in market cap is not really feasible for a coin that already has a $50 billion market cap. 

All this is to say that XRP will probably still have a decent 2022 because the lawsuit will get resolved and most likely in their favor. Just don’t go into 2022 expecting XRP to hit $10 and you won’t be disappointed. 

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