XRP investors are looking forward to the resolution of the SEC v. Ripple case, as a favorable outcome could boost the market’s value perception on the, already, 5th most valuable cryptocurrency. This could make the price of XRP drastically increase in the seek of historical values measured by market cap.
On January 6, 2018, XRP had a market cap of $131.65 billion, according to Coingecko’s index, for a price all-time high of $3.4, with a total of around 38.72 billion XRP circulating.
Right now, XRP sits in the 5th position by market capitalization among all crypto assets, valued at a total of $31.7 billion (2.64% dominance). With a circulation supply of 52.78 billion XRP, the cryptocurrency was trading at $0.60, by press time.
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In a hypothetical scenario where the circulating supply wouldn’t change, 1 XRP would be worth $2.5 if it ever reaches its all-time high market cap. Rewarding today’s investors with over 300% (4x) price appreciation.
However, as time goes by, Ripple might add more tokens into circulation through the unlock/lock escrow system, which effectively lowers the price per unit for the same market cap.
Ripple’s escrow system and XRP inflation
Currently, there is still a locked amount of around 47.22 billion XRP in a type of escrow developed by Ripple, to guarantee a controlled and programmed distribution of new tokens to the market.
Each month, 1 billion XRP is automatically unlocked by these escrows, but Ripple can decide to re-lock any amount back to a new escrow that will be unlocked in the future. The company has often chosen to re-lock the majority of the unlocked supply.
In both July and August 2023, only 200 million new XRP were kept by Ripple, as registered in both this thread and by the Whale Alert account.
XRP price with a fully diluted market cap
In the worst-case scenario, if Ripple keeps 1 billion XRP every month, it would take close to four years for all 47 billion units to be put into circulation, resulting in a 23% annual inflation for the first year, followed by an 18%, 15%, and 12% annual inflation for the following years.
By the end of these four years, all XRP would be unlocked, resulting in a fully diluted market cap of $60 billion, considering current prices.
This could also reward today’s investors with around 120% in gains (more than 2x) in a positive outcome from the SEC case and the pursuit of XRP’s all-time high market cap. Resulting in a price of $1.31 per XRP.
XRP price analysis
Meanwhile, XRP is trading at $0.60 by press time, with a registered loss of 4.17% in the last 24 hours.
All things considered, the SEC v. Ripple case could indeed have a major effect on the price of XRP, although the quantity of this effect will further depend on the general sentiment on the wider crypto market, the increase in the token’s demand, and other developments or positive news surrounding its development. Which could drive the market’s perception of value even further from XRP’s all-time high market cap of $131 billion.
Negative outcomes could also have a meaningful impact on price and market cap expectations.
Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.
