In a recent YouTube video, XRP community member Zach Rector delved into Chad Steingraber’s theory proposing XRP road to $20,000.
Emphasizing the theory was not his, Rector highlighted Steingraber’s words and acknowledged the ambitious nature of a $20,000 prediction. He suggested that the theory might be plausible for XRP to attain higher values, even if not necessarily reaching $20,000.
Steingraber, a game designer within the community, updated this theory on December 30, 2023. He navigated through various key points that offer perspectives on XRP’s journey to higher values.
XRP As Asset Scarcity
Steingraber underscores the concept of “Asset Scarcity,” likening it to an auction bid scenario where limited assets fuel a demand-induced surge in value.
He delves into the notion that extrapolating current prices into unrealized value, combined with XRP’s deflationary nature, sets the stage for a substantial price increase.
The theory delves into the importance of limited assets, drawing parallels with the Mona Lisa to illustrate the point. Steingraber highlights XRP’s constrained supply, currently below 100 billion, and its deflationary mechanism facilitated by ledger transactions.
To offer context for newcomers, Steingraber emphasizes that each XRPL transaction results in the burning of the token. He attributes the perceived low value of XRP to current trading occurring within a limited public pool.
The game developer argues that banks opt for regulated custodians, not public exchanges, for transactions, emphasizing their preference for privacy. He points out that Ripple Payments democratize access for smaller entities, signaling a shift from the expected use of On-Demand Liquidity (ODL).
Institutional Interest in Driving Scarcity
The theory takes a turn toward banks creating private ledgers, as he sees XRP as a reserve currency akin to gold. Steingraber highlighted the potential creation of bank-specific coins on private XRPLs.
Also read: Ripple Ends 2023 with Memetastic Challenge, XRP Ledger Breaks Record
To him, these banks could seek custody of their tokens by leveraging Ripple-owned Metaco. If materialize, Steingraber emphasized that the phenomenon could lead to global competition among banks to procure and hoard XRP, which would serve as the reserve currency for their tokens.
The theory presents the idea that as this race picks up, banks and liquidity hubs could rapidly drain the public XRP supply, triggering a surge in prices. Banks and billionaires, driven by a business dependency on XRP, could engage in a massive institutional buying frenzy.
While $20,000 represents a price target too ambitious, commentators have highlighted the rationality of the theory. Currently, XRP trades at ……per token.
