The XRP community is abuzz with excitement following Ripple’s recent announcement of plans to introduce a USD-backed stablecoin on the XRP Ledger (XRPL), aiming to rival Tether (USDT) and USD Coin (USDC) in the stablecoin arena. This move, expected to materialize before the close of 2024, has sparked speculation regarding its potential effects on the price of the digital token XRP.
Ripple’s decision comes amidst projections of a significant surge in the stablecoin market, currently valued at over $150 billion, with estimates forecasting it to balloon to an impressive $2.8 trillion by 2028. Ripple has cited these projections, among other factors, as driving forces behind its foray into the stablecoin domain.
Related article: Stablecoin Surge: Ripple’s Impact on XRP Debunked
The anticipation of this substantial market expansion has spurred Ripple to seize the opportunity. By introducing a USD stablecoin directly on the XRPL, Ripple aims to establish itself as a prominent player in this swiftly expanding sector. However, discussions have emerged regarding the potential ramifications for XRP in light of this development.
Analysts’ Shares Price Prediction
Ripple’s announcement has stirred up a wave of optimism within the cryptocurrency community, particularly regarding the potential advantages it may bring to XRP. Analysts are closely scrutinizing how integrating this new utility could impact the value of XRP within the XRPL ecosystem.
One notable figure, Rob Cunningham (@KuwlShow), the founder of KWUL Research, has provided a specific price forecast for XRP based on the projected $2.8 trillion market size for stablecoins by 2028. Cunningham’s analysis revolves around believing the market is poised for significant expansion, potentially growing nearly 20 times in the next four years.
According to this forecast, Cunningham suggests that XRP could follow a similar growth trajectory, potentially reaching $12 within the next four years. This assessment takes into account the expected increase in utility for XRP resulting from Ripple’s stablecoin initiative. Cunningham also acknowledges the possibility of XRP surpassing this value due to its established functionalities beyond the stablecoin sector.
Counter Arguments from Prominent Voices
Not everyone in the cryptocurrency community shares Cunningham’s optimistic perspective. Panos Mekras (@panosmek) has voiced concerns regarding the methodology behind the $12 XRP price target. Furthermore, Mekras argues that Cunningham’s approach assumes a direct link between the projected market size of stablecoins and the specific value of XRP.
Mekras highlights an important distinction: the $2.8 trillion market capitalization refers to the entire stablecoin market, not solely Ripple’s stablecoin. Additionally, Mekras points out that the funds allocated to Ripple’s stablecoin project are separate from those allocated to XRP.
Related also: XRP’s Next Chapter: Ripple’s USD-Backed Stablecoin Initiative
An uptick in the issuance of Ripple’s stablecoin does not automatically lead to a direct increase in XRP’s price. Nonetheless, other endeavors indicate that the digital token has a promising future in the cryptocurrency market.
