XRP Value Driven by Institutional Demand, Not Network Activity Alone

Ripple CEO Brad Garlinghouse emphasized that XRP's value is not solely determined by network transaction counts. In fact, he believes that demand and supply, real-world use, and liquidity are far more important factors.

Giving a talk at the Phaena Forum event on September 25, Garlinghouse explained how XRP's price is driven by institutional demand and market liquidity, rather than simple network activity. He pointed out that when assets become harder to quickly convert into cash or switch into other assets, they can become more burdensome to hold.

Ripple has invested over $1 billion in companies connected to the XRP ecosystem, with a focus on widening XRP's demand base through ecosystem investment and expanded financial use. Garlinghouse also noted that XRP was once the second-largest digital asset by market capitalization before a lawsuit by the U.S. Securities and Exchange Commission.

The CEO stressed the importance of liquidity for institutional investors, stating that the easier an asset is to buy and sell, the better suited it is for financial institutions. He also mentioned that as use in institutional payments and financial infrastructure grows and liquidity deepens to support it, demand for XRP could rise.