Jump to content

How XRP value will rise with utility


Recommended Posts

I am curious to see if some of you could poke some holes to my logic below, just to hear some different points of view, to see if I am wrong. Please add detail if you think it is generally right. 

The response below is to the question: How will the price of XRP go up with utility?

When XRP becomes a tool that is successful, financial institutions will hold that tool (not forever, but generally, for convenience). Today, FI's use nostro and vostro accounts full of various currency reserves around the world. These accounts are a significant drag on the world economy. Money sitting around has an opportunity cost. If XRP creates a bridge to all currencies and allows FI's to free up their worldwide reserves, they will do it in a heartbeat. At the same time, the FI's may still want to hold a small portion of XRP to eliminate the initial conversion from currency ----> XRP. Imagine it this way, an FI has a pool of XRP, it is constantly receiving incoming XRP and sending XRP but it may want to maintain the pool in case a large send order comes through. The FI may use derivatives to hedge the pool, but this hedge may be absorbed by speculators, the actual pool itself would still take supply out of the XRP ecosystem. This is just one example of how more and more XRP would become in demand as it becomes a successful bridge token. Once that ^ example is observed, realized, and understood, speculation will explode. Additionally, citizens of countries with unstable currencies, who already hold significant amounts of USD, will gradually prefer a flexible store of value such as XRP that is not subject to any sort of government manipulation/inflation. Eventually, I believe much of private and corporate wealth will be stored in an asset like XRP when ever they are in a "cash" position (not actively invested in equities, assets, working capital, bonds, etc.)

Link to post
Share on other sites
12 hours ago, xrpsailor1 said:

I am curious to see if some of you could poke some holes to my logic below, just to hear some different points of view, to see if I am wrong. Please add detail if you think it is generally right. 

The response below is to the question: How will the price of XRP go up with utility?

When XRP becomes a tool that is successful, financial institutions will hold that tool (not forever, but generally, for convenience). Today, FI's use nostro and vostro accounts full of various currency reserves around the world. These accounts are a significant drag on the world economy. Money sitting around has an opportunity cost. If XRP creates a bridge to all currencies and allows FI's to free up their worldwide reserves, they will do it in a heartbeat. At the same time, the FI's may still want to hold a small portion of XRP to eliminate the initial conversion from currency ----> XRP. Imagine it this way, an FI has a pool of XRP, it is constantly receiving incoming XRP and sending XRP but it may want to maintain the pool in case a large send order comes through. The FI may use derivatives to hedge the pool, but this hedge may be absorbed by speculators, the actual pool itself would still take supply out of the XRP ecosystem. This is just one example of how more and more XRP would become in demand as it becomes a successful bridge token. Once that ^ example is observed, realized, and understood, speculation will explode. Additionally, citizens of countries with unstable currencies, who already hold significant amounts of USD, will gradually prefer a flexible store of value such as XRP that is not subject to any sort of government manipulation/inflation. Eventually, I believe much of private and corporate wealth will be stored in an asset like XRP when ever they are in a "cash" position (not actively invested in equities, assets, working capital, bonds, etc.)

This makes sense. However, isn't it safe to say that most of the professionals and executives at all the large banks/FI's/companies Ripple has been working with for years now understand this concept as well? Why aren't major exchanges, banks, and corporates (that are familiar with this tech and the opportunity ahead) loading up on XRP at this moment? To think that a small group of retail speculators on the internet know more about global monetary policy and plans than leading banks and governments seems a bit crazy in my opinion.

Link to post
Share on other sites
11 minutes ago, XRPboi said:

This makes sense. However, isn't it safe to say that most of the professionals and executives at all the large banks/FI's/companies Ripple has been working with for years now understand this concept as well? Why aren't major exchanges, banks, and corporates (that are familiar with this tech and the opportunity ahead) loading up on XRP at this moment? To think that a small group of retail speculators on the internet know more about global monetary policy and plans than leading banks and governments seems a bit crazy in my opinion.

Your vastly overestimating the intelligence and awareness of people in C level positions. Especially when it comes to forward thinking

Link to post
Share on other sites
30 minutes ago, XRPwinning said:

Your vastly overestimating the intelligence and awareness of people in C level positions. Especially when it comes to forward thinking

300+ of the worlds largest banks and institutions are each paying Ripple millions of dollars to upgrade and install their backend software solutions... Yet they aren't aware that they can save an additional ~60% on operating costs if they hold XRP? 

That is difficult to wrap my head around. 

Link to post
Share on other sites
14 minutes ago, XRPboi said:

300+ of the worlds largest banks and institutions are each paying Ripple millions of dollars to upgrade and install their backend software solutions... Yet they aren't aware that they can save an additional ~60% on operating costs if they hold XRP? 

That is difficult to wrap my head around. 

Sure they are aware, but not confident enough to put their neck out and be the first. Knowing with near certainty that digital assets are the future. Knowing that every day their company delays implementation is another day they are behind. This is the big difference between being aware and actually being a forward thinking leader. Very few of these types exist, Chris Larsen would be on the absolute extreme end of this spectrum

And the savings can come from just using XRP, not holding it

Link to post
Share on other sites
21 minutes ago, XRPboi said:

300+ of the worlds largest banks and institutions are each paying Ripple millions of dollars to upgrade and install their backend software solutions... Yet they aren't aware that they can save an additional ~60% on operating costs if they hold XRP? 

That is difficult to wrap my head around. 

I think it's more about the legalities of holding a digital asset as a corporation not being clear, and being a new asset class making it impossible to justify large scale "gambling" to shareholders! 

Link to post
Share on other sites
2 hours ago, GoonerAdy said:

I think it's more about the legalities of holding a digital asset as a corporation not being clear, and being a new asset class making it impossible to justify large scale "gambling" to shareholders! 

I think that you pretty much nailed it. It gonna take regulatory clarity, whether or not that soon occurs here, or if starts somewhere like in Japan. Once a decent "map" is sketched out, I believe that banks, businesses, and institutions in other countries, will quickly follow suit and begin building their own pools of xrp liquidity. With the huge amount of xrp created, the corresponding sizes of the liquidity pools attainable is almost unimaginable and the scale of how valuable xrp may one day become in brokering unimaginable amounts of transactions. The IoV is coming, and I believe that it's potential scope is actually hard to grasp. I feel as if it's going to make watching this all rolling out over the next ten years or so, an extraordinary journey. 

Link to post
Share on other sites
4 hours ago, WuWei said:

I think that you pretty much nailed it. It gonna take regulatory clarity, whether or not that soon occurs here, or if starts somewhere like in Japan. Once a decent "map" is sketched out, I believe that banks, businesses, and institutions in other countries, will quickly follow suit and begin building their own pools of xrp liquidity. With the huge amount of xrp created, the corresponding sizes of the liquidity pools attainable is almost unimaginable and the scale of how valuable xrp may one day become in brokering unimaginable amounts of transactions. The IoV is coming, and I believe that it's potential scope is actually hard to grasp. I feel as if it's going to make watching this all rolling out over the next ten years or so, an extraordinary journey. 

I agree we are in the front seats watching something historic.  I think Ripple/XRP are already unstoppable and the scale of change will be equivalent to the beginning of the Internet.  Time scale is difficult to estimate, but once launched it will spawn many sorts of new conceptual ideas that will roll through the IoV changing our ways of living and managing our incomes.

Link to post
Share on other sites
16 minutes ago, Julian_Williams said:

I agree we are in the front seats watching something historic.  I think Ripple/XRP are already unstoppable and the scale of change will be equivalent to the beginning of the Internet.  Time scale is difficult to estimate, but once launched it will spawn many sorts of new conceptual ideas that will roll through the IoV changing our ways of living and managing our incomes.

I agree with your post almost in its entirety.  The only part I disagree with is the unstoppable bit.  In my opinion, unfortunately, any number of unlucky circumstances could conspire to derail the IoV plan.

I’m pretty sure Ripple are leaving nothing to chance if it’s possible to mitigate against...  but there are larger forces that could derail the train if unforeseen events occur.  I hope not, and I think they will likely succeed,  but I don’t think that success is as yet assured.

In a way the market, pathetically stupid as it may be, has spoken on this...  and so far it is not seeing assured success.  I think we will all know about it when the success really is assured...  the market will catch up with our enthusiasm and the price will climb.

Link to post
Share on other sites
10 minutes ago, Tinyaccount said:

I agree with your post almost in its entirety.  The only part I disagree with is the unstoppable bit.  In my opinion, unfortunately, any number of unlucky circumstances could conspire to derail the IoV plan.

I’m pretty sure Ripple are leaving nothing to chance if it’s possible to mitigate against...  but there are larger forces that could derail the train if unforeseen events occur.  I hope not, and I think they will likely succeed,  but I don’t think that success is as yet assured.

In a way the market, pathetically stupid as it may be, has spoken on this...  and so far it is not seeing assured success.  I think we will all know about it when the success really is assured...  the market will catch up with our enthusiasm and the price will climb.

For me the IoV needs stable coins, smart contract tech, XRPL and a without counter party DA

A competitor for XRP's role as without counter party DA has to build the tech (there are shortages of blockchain engineers), build the management and marketing team, develop the exchanges, build the ecosystem and partnerships, test and provide regulation approval with AML and KYC.  I just do not see how anyone can do that within the next five years, and by then it will be too late.

 

Edited by Julian_Williams
Link to post
Share on other sites
7 hours ago, GoonerAdy said:

I think it's more about the legalities of holding a digital asset as a corporation not being clear, and being a new asset class making it impossible to justify large scale "gambling" to shareholders! 

That, and I believe Volatile, unpredictable Crypto Holdings as assets would be frowned upon to modern day USA bank stress tests.

Link to post
Share on other sites
4 minutes ago, ManBearPig said:

That, and I believe Volatile, unpredictable Crypto Holdings as assets would be frowned upon to modern day USA bank stress tests.

Ripplenet does not need banks, it can be set up and run by FIs.

Global standards are being set up, and the US Financial centres have to fit in with those standards if they are to maintain their pivotal role in the FX industry.

Link to post
Share on other sites
16 hours ago, XRPboi said:

Why aren't major exchanges, banks, and corporates (that are familiar with this tech and the opportunity ahead) loading up on XRP at this moment?

This may be happening to a certain extent. Remember that entities will not place one huge order that will push up the market, instead they will spread it out over a significant period of time in order to accumulate. OTC sales, XRP gifts and loans, and other kinds of deals could also be part of this 'loading up'. 

I agree with others though that the big demand is not here yet. Proof of utility will help to stimulate that. 

Link to post
Share on other sites
On 10/28/2019 at 11:09 PM, Julian_Williams said:

Ripplenet does not need banks

And that’s a scary revelation from a bank’s perspective for adoption. Ripple’s technology proposal moves decades of long-held financial processes, profit models, people skills needs and organizational structures to the side and flattens the whole concept. 

From the banks perspective this so-called bankers coin lacking government clarity doesn’t seem like that great of an idea (to many banks). It’s too disruptive.

For the group of banks that are leaning forward with it they are likely to be the ones that thrive and survive. 
For a perspective that will really challenge your XRP understanding and beliefs check out this recent video by the DAI. 
CAUTION: Tin foil wrapped around your head before viewing maybe suitable for some viewers.

 

Link to post
Share on other sites
×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.