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Why the price of XRP has almost NOTHING to do with utility


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It's crazy isn't it? These crazy fluctuations in XRP (and other cryptocurrencies)

AS much as I, like many other people love the utility of XRP, and how it can change the world of finance, this isn't the biggest reason for our interest.

It's about making money. 

Just like others, I invested and bought a few Zerps because I saw an opportunity to make money. Yes, Xrapid, Xcurrent and all these other technologies might change the banking and finance landscape as we know it, but truthfully, we saw an opportunity to cash in on the rising price of XRP. 

For those like me, let me let you in on a little secret:

The price of XRP has almost NOTHING to do with it's utility. 

That's right. Even though there are a number of new ways in which the Ripple network is bringing innovation, none of these have or will have a major impact on the price of XRP.

That isn't to say that they have NO effect on the prices, but to say that the major driving force of any past, current and future XRP prices is something simple.

Supply and demand of the overall crypto market, especially Bitcoin

That's it. How "hyped" or "dehyped" the overall crypto market is the single largest factor on the price of XRP.

Like ALL other crytocurrencies, XRP's value is largely based on Bitcoin's fortunes. The price of Bitcoin, which is by far the largest cryptocurrency, is the biggest driving factor. 

Bitcoin goes up? In general, all the other coins rise in value.

Bitcoin down? All the other currencies sink.

Of course, this doesn't happen in a "straight line" - but when Bitcoin prices go up, this means that the "hype" for crypto, in general, increases. Which leads to more people looking at other, cheaper options, which means that there is a lot more room for growth and higher likelihood of larger price increases as investors look for a "cheaper" option.

When Bitcoin prices go down, we tend to see the same trend - other crypto are hit even harder as investors who came in at the peak panic as they begin rapidly losing their investment as prices plunge, which has a ripple effect (haha).

I like to compare the crypto market to gold, and other precious metals valuation

Are gold and other precious metals useful? Sure. However, they sure aren't used as a regular, day to day basis for most people. Instead, gold has become a store of value. Gold's value increases simply because OTHER people want another store of value in case of issues with local currency, such as deflation. The price of gold is generally stable worldwide, similar to crypto.

Despite the fact that the vast majority of the world's population have little utility for gold, and do not own any gold, the price of gold has risen significantly within the past 25 years - From $273 in 200 to $1664 in 2012. And although there have been some dips, the price of gold has increased steadily almost yearly

What does this mean 

It means simply that you should be paying less attention (please note I didn't say NO attention) to the developments coming out of the Ripplesphere, and more attention to the sentiment and feeling on the ground of cryptocurrency, especially Bitcoin.

 

Anyone agree/disagrees?

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Mate I know you are a @Worldcryptoboss but you are so wrong with your post. It all has to do with the maturity of the market.

Immature market -> easy to manipulate -> very speculative buyers with loads of emotion -> lots of connecting with BTC indeed (due to pairing on exchanges)

More mature market -> not so easy to manipulate -> more smart money - > everything has to do with utility.

Unless crypto changes all rules of economics (which won't happen) you will see XRP up like a rocket in a year or so.

 

 

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If you are limiting the scope of your argument to our present situation, then yes, I would agree - the price is driven by speculative investors right now.  But the reason to pay attention to the news about XRP use is that its anticipated use will unavoidably drive the price up -significantly.  Use case is everything for a long-term investment.  Your approach seems appropriate for day traders, and they will continue to trade through trends, but long term investment is counting on use case, not daily markets.  Your argument comparing it to gold is incorrect for XRP - compare it to oil perhaps.  BTC compares to gold because it's use case is largely static.  Cheers

Edited by WrathofKahneman
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36 minutes ago, CryptoGerrie said:

Mate I know you are a @Worldcryptoboss but you are so wrong with your post. It all has to do with the maturity of the market.

Immature market -> easy to manipulate -> very speculative buyers with loads of emotion -> lots of connecting with BTC indeed (due to pairing on exchanges)

More mature market -> not so easy to manipulate -> more smart money - > everything has to do with utility.

Unless crypto changes all rules of economics (which won't happen) you will see XRP up like a rocket in a year or so.

 

 

Other "mature" markets run on emotion. The second there's a war in the middle east the price flares up - despite the fact that the vast majority of oil is now produced outside of those countries, and that these conflicts have had very little to do with the supply of petroleum products 

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13 minutes ago, WrathofKahneman said:

If you are limiting the scope of your argument to our present situation, then yes, I would agree - the price is driven by speculative investors right now.  But the reason to pay attention to the news about XRP use is that its anticipated use will unavoidably drive the price up -significantly.  Use case is everything for a long-term investment.  Your approach seems appropriate for day traders, and they will continue to trade through trends, but long term investment is counting on use case, not daily markets.  Your argument comparing it to gold is incorrect for XRP - compare it to oil perhaps.  BTC compares to gold because it's use case is largely static.  Cheers

Have we ever seen a case where any of crypto currency has seen significant and stable, and medium term (2-3 month) rises at point when Bitcoin was falling ?

Mind you I believe that Ripple is a fantastic company, and that XRP and the other products coming out of Ripple labs are fabolous. I just don't think that these products innovation has had, or will have, a significant impact on the price. 

 

 

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3 minutes ago, Worldcryptoboss said:

Other "mature" markets run on emotion. The second there's a war in the middle east the price flares up - despite the fact that the vast majority of oil is now produced outside of those countries, and that these conflicts have had very little to do with the supply of petroleum products 

Sure, but you honestly can't compare the current market with OIL. It is way less mature. Not saying that no other markets are not filled with emotions, but for sure not on the level of crypto. I mean last year December was crazy, even my personal fitness trainer was checking on his phone the crypto prices. Completely out of control, full of emotions and Twitter represents this perfectly

I truly believe and sincerely hope that Utility will drive price. The only way how this is being achieved is time and more smart money. Also don't agree so much on your point regarding good news. Yes the Ecosystem is being built fair enough, but still, there are a load of hurdles to take. Institutional money moves different and you know that. They are not in for a high risk, high reward. They want a well-placed bet and XRP (at this stage) is simply not. Might change, but don't expect it to be soon. Goes for any token/ coin btw in the crypto.

At least I didn't invest so much in crypto if I didn't want to take a ridiculously high risk. 

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7 minutes ago, CryptoGerrie said:

Sure, but you honestly can't compare the current market with OIL. It is way less mature. Not saying that no other markets are not filled with emotions, but for sure not on the level of crypto. I mean last year December was crazy, even my personal fitness trainer was checking on his phone the crypto prices. Completely out of control, full of emotions and Twitter represents this perfectly

I truly believe and sincerely hope that Utility will drive price. The only way how this is being achieved is time and more smart money. Also don't agree so much on your point regarding good news. Yes the Ecosystem is being built fair enough, but still, there are a load of hurdles to take. Institutional money moves different and you know that. They are not in for a high risk, high reward. They want a well-placed bet and XRP (at this stage) is simply not. Might change, but don't expect it to be soon. Goes for any token/ coin btw in the crypto.

At least I didn't invest so much in crypto if I didn't want to take a ridiculously high risk. 

I would LOVE if utility drives the price. However, so far that has not been happening and I highly doubt that will change in the short to mid term.

I totally agree that the crypto market is far less mature than oil, and that it will likely gain some stability as time goes on. Not sure that that in any way detracts from my central point though

I think even IF banks do adopt some sort of Ripple protocol or use their systems en mass, it would still not have a major impact on the price of XRP

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1 minute ago, Worldcryptoboss said:

I would LOVE if utility drives the price. However, so far that has not been happening and I highly doubt that will change in the short to mid term.

I totally agree that the crypto market is far less mature than oil, and that it will likely gain some stability as time goes on. Not sure that that in any way detracts from my central point though

I think even IF banks do adopt some sort of Ripple protocol or use their systems en mass, it would still not have a major impact on the price of XRP

You can't tell till a bank starts using Xrapid. Let's see who is right  and save this post.

For now, the price is indeed purely speculative and too much tight up to BTC and XRP is a bargain.

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4 minutes ago, CryptoGerrie said:

You can't tell till a bank starts using Xrapid. Let's see who is right  and save this post.

For now, the price is indeed purely speculative and too much tight up to BTC and XRP is a bargain.

I agree XRP is a bargain at the present moment. I have no doubt that XRP will surpass it's previous ATH within the next 12-24 months, which means that people investing now will likely improve their investment by 5x - 10x. 

However, I highly doubt we will see large scale adoption by the banks within any short-medium term time frame  (anything less than 5 years). If we're both around on the forum in 2023, feel free to remind me!

 

 

 

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You're right in the sense that TODAY utility doesn't drive the value, that's because as of today there is no utility. XRP right now is as worthless as all the other coins. 

Fast forward 3-5 years when xRapid is the driving force behind 1 trillion dollars plus of daily cross border transactions, well... your argument will be invalid and I wouldn't care either way because I'll be drunk on a tropical beach enjoying my early retirement.

Edited by kev4022
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