Market cap arguments always dominate debates around XRP’s long-term price potential, especially when double-digit and triple-digit targets are mentioned. Critics point to the altcoin’s large circulating supply and compare its implied valuation to banks and major corporations, using that comparison as a reason to dismiss higher price scenarios. 

However, a few analysts also contend that this framework misunderstands what the token is designed to do. According to one such expert, the problem is not the math itself, but the model being used to interpret it.

Why Bank Market Cap Comparisons Miss The Point

Crypto analyst Crypto Luke recently pushed back against the idea that XRP should be valued using the same logic applied to banks and financial institutions. The idea is that banks process enormous volumes of money every day, often in the trillions, but they do not hold that money on their balance sheets. The market capitalizations of banks are based on earnings, risk exposure, regulatory burdens, and operational efficiency, not the total value that flows through their systems.

Comparing XRP to financial institutions such as BNY Mellon mixes two very different concepts. Banks act as intermediaries that move other people’s money and earn fees along the way. The altcoin, on the other hand, is not a company but a liquidity bridge. It is designed to be the asset that actually settles value. Therefore, using equity-style market cap comparisons to judge a settlement asset like XRP leads to conclusions that are incomplete.

What This Means For XRP Price Debates

As noted by the expert, the design question isn’t how much volume moves; it’s how much capital must exist to support that movement without pre-funding.

It is important to note that the claim that market cap theory doesn’t apply to XRP is not a denial of basic math. Price multiplied by supply will always equal market capitalization. However, what Crypto Luke and others are challenging is the assumption that its market cap must be interpreted the same way as that of a bank or a traditional company. 

Related Reading: XRP Price At $10 Too Low? Pundit Says That’s For Retail, Reveals Institutional Targets

Another analyst, Pantoja, dismissed the idea that market cap is a hindrance for the altcoin to reach $1,000. The analyst noted that long-term XRP valuation will hinge on the real-world adoption of its underlying technology. Speaking of adoption, the adoption is talking about the token and the XRP Ledger being used by banks for cross-border settlements.

At the time of writing, XRP has a circulating supply of 60.7 billion XRP tokens. If the cryptocurrency were to reach a double-digit price, such as $10, based on the current supply, the implied market capitalization would be about $607 billion. That sounds extreme at first glance, but it is not automatically impossible. For context, Bitcoin’s market cap is about $1.79 trillion, so this is possible for a cryptocurrency.

This perspective weakens blanket statements that the token cannot reach certain price levels simply because the implied valuation looks large when placed next to corporate balance sheets. At the same time, it does not automatically validate extreme price targets. One crypto analyst, Mason Versluis, noted $10 is a much more realistic price target than $10,000 predictions.

XRP has racked up major wins recently, from regulatory breakthroughs to network upgrades, yet its price continues to slide. A crypto analyst has shared insights into why this is happening, outlining several developments this week that would typically act as bullish catalysts for the XRP price, but have so far failed to push the token out of its downtrend and propel its value to new highs. 

XRP Sees Four Major Developments In One Week

Despite experiencing four major developments in just one week, the XRP price has shown little reaction. Crypto market expert Chain Cartel has pointed out that while many traders focus on immediate price movements, Ripple Labs, the developer of XRP, is quietly building the infrastructure that could position it as a key system of record for digital settlements.

The analyst suggested that the market overlooks structural developments, underestimating their impact on long-term growth. He highlighted rumors of Ripple’s collaboration with Amazon Web Services (AWS) as one of this week’s major events, noting that the alleged partnership explores the use of Amazon Bedrock AI for the XRP Ledger (XRPL). 

With this integration, XRPL system logs that used to take days to process can be analyzed in just minutes. According to Cartel, this is not an “hype AI,” but a development focused on improving security and scalability, and on giving institutions better visibility into XRP. 

In his post, Cartel also highlighted Ripple’s regulatory progress in the UK. He announced that the UK subsidiary of the crypto company has not been registered with the Financial Conduct Authority, which is known as one of the world’s strictest financial regulators. He stressed that this approval is a significant milestone for Ripple, boosting its compliance credentials and international credibility. 

In addition to achieving even greater regulatory clarity, Cartel highlighted Ripple’s partnership with The Bank of New York Mellon (BNY Mellon) as another key development. BNY Mellon recently launched tokenized deposit services for institutional clients, and Ripple Prime, a digital asset prime brokerage platform created after Ripple acquired Hidden Road, is among the first users. Even more important, the analyst said that BNY Mellon remains the primary reserve custodian for RLUSD, showing a direct integration between traditional banking and digital settlement rails. 

Finally, Cartel mentioned the upcoming vote on the CLARITY Act by the US Senate Banking Committee scheduled for January 15. This bill will decide how crypto trading, settlements, and connections to financial systems are regulated in the future. The analyst said that if the bill is passed, it could affect how institutions interact with XRP and the broader crypto market. 

Why The XRP Price Is Still In A  Downtrend

Despite all these developments and milestones, Cartel noted that XRP’s price has barely moved over the week, still trading around $2.0. The analyst stated that the reason the cryptocurrency keeps moving lower is that it reacts less to hype and more to the completion of key infrastructure. 

According to Cartel, these developments are building significant pressure in the market. He described XRP’s situation as a compression before a violent release, suggesting that the cryptocurrency could experience a sharp price rally once the foundational systems are fully in place.