The recent surge of XRP to a new all-time high of $3.65 has captured community attention, sparking expectations for further growth. Experts are focusing on the potential for high price targets stemming from unique market cap characteristics.
The Market Cap Multiplier Concept
Zach Rector, a crypto entrepreneur and commentator, proposed the market cap multiplier concept, which he claims is often overlooked when evaluating crypto assets. He noted that this multiplier reflects the dramatic impacts of capital inflows on XRP’s market capitalization, significantly more so than in traditional markets due to crypto's relative illiquidity. 'What we’ve observed is the market cap multiplier for XRP ranges from 50x to 200x on the way up,' Rector stated.
ETF Inflows Could Accelerate Growth
Other experts agree that market cap limitations cannot hold down XRP. Rector emphasizes that potential additional inflows from XRP ETFs could be far more pronounced. For instance, JP Morgan's forecasts indicate that first-year inflows could range between $4 billion and $8 billion, which could theoretically lead to a $1.7 trillion increase in XRP’s market cap, considering Rector’s upper-end estimate of 200x.
XRP Can Reach These High Prices
Rector concludes that much less capital will be required to achieve high market caps for XRP than traditionally assumed. Despite criticism regarding multi-trillion-dollar market capitalization, he believes XRP is addressing more substantial issues than all publicly traded stocks combined, justifying such ambitious forecasts.
Expert opinions indicate XRP's potential to reach high prices is intertwined with the unique aspects of its market capitalization and demand dynamics. However, caution remains prudent as investors are encouraged to conduct thorough research before making decisions.
