The debate over whether the XRP price could reach $10,000 has reignited in the crypto market. However, this time, one crypto analyst challenges the common argument that market capitalization could limit XRP’s growth. According to the analyst, this claim is flawed and does not take into context XRP’s liquidity and utility as a global settlement currency.
Why Market Cap Does Not Limit Price Surge To $10,000
Some critics argue that XRP would never hit $10,000 because doing so would make its market capitalization exceed the global money supply. Market analyst Crypto_Luke has addressed this misconception in a recent X post, emphasizing that market cap does not limit the XRP price in any way.
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The analyst explained that market cap is simply the last traded price multiplied by a cryptocurrency’s circulating supply, which is a snapshot of overall trading activity and not a reflection of how much money is required to achieve a certain price. He noted that the common criticism that market capitalization represents the amount of money invested in an asset is inaccurate.
One reason Crypto_Luke believes the market cap argument is flawed is that it fails to account for how XRP operates. Unlike assets designed primarily for storing value, such as BTC, XRP is designed for rapid liquidity and settlement across global corridors. He stated that XRP can be used multiple times in a single day, facilitating transactions without requiring additional capital. As a result, he suggests that XRP’s price is determined by its “actively traded float,” rather than by the total supply that is idle.
In his analysis, Crypto_Luke emphasized that liquidity and price adjustments go hand-in-hand in XRP’s design. He explained that assets that move quickly through settlements allow the blockchain network to satisfy demand without requiring equivalent dollar-for-dollar backing. As XRP’s transaction volume increases, its price naturally adjusts to reflect the value of its utility rather than a fixed market cap.
The analyst noted that XRP’s supply was intentionally designed to be large, fixed, and non-reissuable. This structure supports a multi-trillion-dollar liquidity pool and enables the network to handle high-volume settlement throughput.
XRP Market Cap Crashes Nearly 10%
More recently, XRP faces additional downward pressure, as CMC data shows that the cryptocurrency’s market capitalization has crashed by nearly 10%. As of writing, XRP’s market cap has fallen to approximately $79.25 billion following a massive decline in its price over the past 24 hours.
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The downturn aligns with the broader market sell-off across major cryptocurrencies, as sentiment has become increasingly bearish. XRP has been among the worst affected, with its price slipping toward $1.3, marking its lowest levels since 2024. The cryptocurrency shows no clear signs of a rebound despite a recent surge in daily trading volume, which has increased by more than 148%.
Featured image from Freepik, chart from Tradingview.com
Bitcoin critic Peter Schiff recently spoke about the flawed logic of the Bitcoin community arguing about the US National Debt. Many Bitcoin proponents have been stating that the BTC price will soar to millions per coin since many believe that the Federal Reserve will pivot to money printing soon thereby taking the US national debt even further. Schiff finds this logic absolutely misguided and flawed.
Peter Schiff Criticizes Bitcoin Logic
Schiff slammed the idea that the US government could purchase Bitcoin now and sell it 20 years later in order to repay the national debt without causing inflation. He also highlighted the contradictory nature of believing that the Bitcoin price could reach such high valuations due to inflation, while simultaneously suggesting that the government could use Bitcoin to address the debt issue without further inflating the currency.
Furthermore, Schiff questioned the investment philosophy promoted by President Donald Trump and Michael Saylor wherein both advise to “never sell your Bitcoin”. While challenging this notion on Twitter, Schiff asked: “If that’s true and no one who buys Bitcoin ever sells any, what’s the point of owning it?”
Peter Schiff said that this approach could lead to a paradox wherein investors live in poverty while accumulating BTC. He questioned the practical appeal of such a strategy, suggesting it undermines the purpose of investing in Bitcoin.
Both @saylor and #Trump say “never sell your #Bitcoin.” If that’s true and no one who buys Bitcoin ever sells any, what’s the point of owning it? What’s the appeal of living in poverty, dying with a big stack of Bitcoin, with successive generations of heirs repeating the process?
— Peter Schiff (@PeterSchiff) July 28, 2024
Also Read: US Fed Rate Cut on Radar, Will Bitcoin (BTC) Breakout In August?
Schiff Slams Sen. Lummis’ Bitcoin Investment Proposal
During the Bitcoin conference last Weekend, Wyoming Senator Cynthia Lummis proposed to use $70 billion from the US reserve to buy 1 million Bitcoins i.e. 5% of the total supply. The Senator likened this investment to the historic Louisiana Purchase which doubled the size of the US land at the cost of 3 cents per acre.
Schiff stated that “borrowing billions to buy Bitcoin adds nothing but debt and inflation”. He added that the US government is already in debt, which means that additional expenditure would require further borrowing.
He also stated that Senator Lummis’ suggestion of using forex reserves for the BTC purchase is the same as borrowing, while the reserves could be used to reduce the national debt. Schiff warned that such a move would leave the U.S. without reserves, potentially exacerbating the country’s financial instability.
Also Read: Gemini Co-Founder Warns of Kamala Harris’ ‘Big Bluff’ to Crypto Industry
The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
Going by the handle “@bkiepuszewski,” one X user contends that the transaction processing speed (TPS) metric analysts rely on to measure how fast a blockchain network like Ethereum or the BNB Chain processes transactions is flawed.
Laying out reasons on X, the decentralized finance (DeFi) researcher is convinced that using an alternative metric, the User Ops per second (UOPS), could paint a clearer picture of how well a blockchain is utilized at all times.
Measuring Network Utilization
Typically, blockchain utilization measures how much a given network, for instance, Bitcoin or Ethereum, is being used at a given point. This is critical because it can be used to measure adoption levels since those with higher utilization rates tend to have a broader, active base, which can make it successful over the long haul.
To gauge activity, this metric considers the number of transactions processed every second when dealing with simple transfers or the total value locked (TVL) when dealing with smart contracts deployed.
As of November 1, the average network utilization rate in Ethereum, based on Etherscan data, is around 50%, down from about 100% registered in 2021. Meanwhile, the Bitcoin Transactions Per Day as of early November stood above 433,000, a nearly 2X increase from late October.
Usually, in the case of Bitcoin, considering it is a transactional layer, whenever prices rise, more BTC-related transactions are expected as users hope to increase the emerging trend.
Whether the UOPS system will be adopted in the long term remains to be seen. However, what’s clear is that the UOPS will consider the number of user operations that the network in question can process every second, all while factoring in the level of complexity of that transaction.
Out of the UOPS, analysts will instantaneously know how well the blockchain can handle user load without the risk of congestion, as usually is the case in Ethereum when markets are trending higher.
The Rise Of Ethereum Layer-2s
At the same time, according to @bkiepuszewski, using UOPS instead of TPS brings clarity considering the widespread use of layer-2 solutions, including OP Mainnet, Base, and StarkNet, which bundles transactions offline before confirming them on the mainnet as a single transfer. The more dapps choose layer-2 solutions, the more flawed blockchain throughput calculation will be if TPS guides.
Presently, more developers are opting for layer-2 as their base to avoid scaling issues while accessing the latitude to deploy intensive dapps such as social media platforms, as seen with Friend.tech. According to L2Beat, Arbitrum and OP Mainnet have TVLs of over $6.5 and $2.9 billion, respectively.
Feature image from Canva, chart from TradingView
Brazil’s special committee of the Chamber of Deputies a ‘Bitcoin Bill‘ to legalize the use of $BTC in the country. The Federal Deputy of the country Aureo Ribeiro called Bitcoin a worldwide currency with the potential to change millions of lives.
Brazil
presented a bill to regulate #Bitcoin:
Bitcoin is a worldwide currency that will change the lives of millions
– Federal Deputy Aureo Ribeiro pic.twitter.com/8OCoNbgWTh
— Blockworks (@Blockworks_) October 4, 2021
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The recognition of Bitcoin by the Brazilian parliament is a big breakthrough towards global adoption as the country is the ninth-largest economy in the world.
The majority part of the bill however was focused on tightening regulations around crypto-related crimes where the penalty has been increased by two-thirds. Earlier, crypto money laundering was punished with 6-10 years of imprisonment, but with new regulations coming into effect, it would increase to 16 years. The approved bill would now be analyzed by the Plenary of the Chamber before being implemented.
“The new crypto regulations typify the crimes of fraud in the provision of services of virtual assets, creates the definition of virtual assets and deals with its regulation.”
The Federal Deputy claimed new regulations would improve investment opportunities as heavy fines and punishments would deter scammers. Ribeiro said,
“The market will advance and adjust in Brazil. There will no longer be profiteers using technology to deceive millions of Brazilians”
Brazilians not Happy With the Crypto Regulations
Bitcoin proponents in the West called the bill a great sign of crypto adoption, but Brazilians think otherwise. One of the citizens responded to a tweet claiming the new regulations are not a good thing as they levied heavy taxation on crypto and made banks the leader to make rules of the market.
“Hi, I’m a lawyer from Brazil and I don’t think it’s a good thing. They want to tax crypto and They want to the bank be the leader and say the rules. “
Hi, I’m a lawyer from Brazil and I dont think its actually a good thing. They want to tax crypto and They want to the bank be the leader and say the rules. This were In discussion last week
— Valéria Garcia (@garotacrypto) October 4, 2021
Apart from Brazil, Panama also introduced a bill to legalize the use of Bitcoin and Etheruem in the financial market. El Salvador’s Bitcoin adoption as a legal tender has created a domino effect leading to several other nations such as Brazil, Argentina, Paraguay take an interest and think about following in the footsteps of the Central American nation.
Disclaimer
The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
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