With XRP’s burning mechanism, its price could potentially increase more than 1,507% to almost $30. This increase would occur if its market capitalization reaches just 8% of the U.S. M2 money supply. Along with this projection comes the notion that this increased liquidity will create more demand for riskier assets, such as XRP. That means the current U.S. M2 money supply of $21.86 trillion. Relative to December 2023, this is a 5.3% increase, adding more than $1 trillion total.
In order for XRP to acquire this valuation, its market capitalization would have to hit $1.748 trillion. At 58.82 billion XRP tokens in circulation, that would mean a price of about $29.73 per XRP. This potential valuation would position XRP far beyond Ethereum's current market cap of around $301 billion, though still smaller than Bitcoin's $2.1 trillion valuation.
M2 Money Supply and XRP's Potential
And, usually, a growing M2 money supply is a sign of greater liquidity in the financial system. This can place upward pressure on demand for riskier assets, including speculative cryptocurrencies, like XRP. That 8% threshold of the U.S. M2 money supply is a whopping $1.748 trillion. This value might act as an important magnet or attractor for XRP’s market cap.
XRP has proven its strength by closing above $2 after surviving five months of down markets. Analysts see this breadth — the percentage of stocks participating in the up move — as a very bullish sign of underlying strength. Recently XRP has been recovering, up to $2.24 at the time of writing.
Analyst Predictions and Market Sentiment
Our resident analyst Steph has made the strong call that XRP has already seen its macro cycle low price. This is promising in both a sign of changing sentiment and improving momentum. An XRP price recovery might see a strong surge, possibly pushing it to the $30 level.
Whether or not it is actually possible for XRP to reach that market cap of $1.748 trillion is still up for debate. The current analysis sheds light on the extraordinary macroeconomic forces that have powerful effects on cryptocurrency valuations. There’s one main driver, the M2 money supply. A rising M2 and XRP’s strong triple bottom support are combining strongly. This, along with extremely bullish forecasts by industry analysts, could fuel a massive rally.
Comparing Valuations and Future Outlook
While reaching 8% of the U.S. M2 money supply would place XRP's market cap significantly above Ethereum's current valuation, it's important to note that it would still be smaller than Bitcoin's. This side-by-side makes clear just how much growth would be needed for XRP to achieve that ambitious $29.73 price target.
The cryptocurrency market is highly volatile and speculative, so many economic and social factors could determine the future price trajectory of XRP. Nonetheless, the greenhouse gas emissions analysis released today provides a pretty promising picture given the current economic climate and market trends. Both investors and crypto enthusiasts alike will be eagerly watching XRP’s progress over the next few months. They are looking to see if XRP can capitalize on these may be tailwinds.
