Market expert CharuSan provided an updated roadmap on how XRP will rise to $300 once the CLARITY Act strengthens its usefulness. He cited how banks will start adopting the altcoin via Ripple’s On-Demand Liquidity (ODL), which will, in turn, increase its price.
Expert Provides Updated Roadmap On How XRP Will Reach $300
In a Messagethe expert said that XRP will reach $300 because the price used by banks for transfers is calculated via ODL, and that the circulating supply does not reflect the amount of altcoin available at that specific time. Therefore, CharuSan said that the price is not calculated based on the circulating supply.
He further explained that if the bank transfer amount is $200 billion and the price of XRP is $20, then it will take 10 billion XRP to execute the payment. The expert added that one-time transfers of 3, 5 or 10 billion would create a bottleneck in a coin with a circulating supply of 61 billion, especially since it would be the global banking network using XRP. As such, he believes the price of the token will need to be much higher.
CharuSan stressed that it would not be possible to make transfers from 13,000 banks with small values like 10 or 20 dollars. He also referred to the DTCC and many other institutional businesses that will adopt altcoin for global transactions. The expert earlier predicted that banks would start using it soon after the CLARITY Act was signed into law. He suggested that the rally would happen quickly as Ripple has already partnered with giant infrastructure providers such as Volante, ACI Worldwide, and FINASTRA.
Why a higher price is necessary
CharuSan further explained why the price of XRP needed to be higher for this level of adoption, noting that the speed of the token is no substitute for the depth of liquidity. He explained that it is necessary to consider simultaneous global trading volume and how, with a value of billions, they could be blocked even with 3-5 second settlement between thousands of banks. He added that if the trading volume exceeds the pool depth, slippage is inevitable.
He gave the example of the token as a super-fast car and that if 300 cars move on the same wavelength in a tunnel that can only accommodate 20 cars, there will likely be a bottleneck because an accident will occur at the entrance to the tunnel. The tunnel must therefore be large enough to accommodate 300 cars without causing friction. Similarly, CharuSan suggested that The price of XRP must be higher to accommodate all these global transactions simultaneously.
At the time of writing, the altcoin’s price is trading at around $1.38, down over the past 24 hours, according to data from CoinMarketCap.
Featured image from Getty Images, chart from Tradingview.com
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