XRP Needs Institutional Collateral Adoption, Not Payment Volume

Ripple's XRP token has been touted as a potential payment utility that could justify high valuations, but crypto analyst xrpl_Adam disagrees. He argues that payment volume alone cannot drive XRP to triple-digit prices and that the token needs to become an asset held as collateral by institutions instead.

XRP's fully diluted valuation would approach $10 trillion at a price of $100, which far exceeds what a payment utility alone could reasonably support. According to xrpl_Adam, 'volume doesn't set the price. Idle inventory does.' He compared XRP to gold, whose value comes from long-term holdings and collateral rather than transaction throughput.

The idea has gained attention due to Ripple's expansion of its institutional infrastructure, including the acquisition of Hidden Road, a global prime brokerage business that provides clearing, financing, and collateral services. However, neither Hidden Road nor Ripple has publicly listed XRP as eligible collateral under any published margin or collateral framework.

xrpl_Adam emphasizes that collateral adoption is crucial for XRP's valuation, and he argues that payment volume alone cannot justify extreme valuations. The analyst suggests that the broader trend toward tokenized collateral could eventually strengthen the case for XRP, but no major institution has formally recognized the token as eligible collateral.