XRP Price: Dr Stevenson on Why Banks Need It Higher

What to Know:

• A finance expert suggests institutions need a higher XRP price for efficient large-scale transactions.
• This perspective contrasts with retail investors’ focus on short-term price movements, highlighting XRP’s role as infrastructure.
• The analysis emphasizes XRP’s function in facilitating institutional flows rather than speculative trading.

As XRP navigates the broader crypto market’s volatility, a contrasting viewpoint has emerged, challenging the conventional focus on short-term price action. Dr. Camila Stevenson, a health and finance expert, suggests that the true value of XRP lies in its potential to serve as critical infrastructure for institutional financial flows. This perspective shifts the focus from speculative trading to the asset’s utility in facilitating large-scale transactions.

The Institutional Perspective on XRP

Dr. Stevenson argues that institutions evaluate assets based on their ability to solve problems, perform under stress, and move value at scale, rather than focusing on short-term price movements. This “inside out” approach contrasts with retail investors’ focus on charts and price levels. She posits that XRP was designed as “financial plumbing,” essential infrastructure that only draws attention when it malfunctions. This is similar to how engineers evaluate a bridge based on its load-bearing capacity rather than its current cost.

XRP as a Liquidity Instrument

XRP functions as a liquidity instrument, and its fixed supply means that its capacity to support larger transaction volumes depends on each unit representing more value. This is because institutions prefer to move billions using fewer, higher-value units for efficiency. A higher XRP price improves this efficiency, enabling banks to move substantial sums more effectively. This echoes Ripple CTO David Schwartz’s earlier statement that XRP “cannot be dirt cheap” if it is to fulfill its intended purpose.

The Importance of Stability and Liquidity

For institutions, stability, deep liquidity, and predictable settlement are paramount. Sudden price spikes can signal instability, which is undesirable for firms seeking to move large sums of money safely. Instead, institutions value the ability to quietly absorb supply and maintain consistent performance. This perspective aligns with analysts who urge investors to consider XRP in terms of flows rather than price.

Off-Exchange Positioning

Institutions often position themselves off-exchange through custodians, OTC desks, and private agreements. This activity does not always manifest as dramatic price movements on public charts. These behind-the-scenes maneuvers are designed to ensure smooth and efficient transactions without disrupting the market.

Contrasting Retail and Institutional Priorities

The fundamental difference lies in the questions asked by retail and institutional investors. Retail investors focus on potential resale value, while institutions prioritize the asset’s ability to handle massive flows without system failure. XRP’s design aims to answer the latter question, positioning it as a critical component of the global financial infrastructure.

In conclusion, while retail investors often focus on short-term price fluctuations, institutions view XRP through the lens of infrastructure, assessing its ability to facilitate large-scale transactions efficiently and reliably. This perspective underscores the importance of stability, liquidity, and off-exchange positioning in understanding XRP’s true value proposition. Ultimately, the long-term success of XRP may hinge on its ability to meet the demands of institutional financial flows, regardless of short-term price movements.

Related: XRP Signals Rebound Amid $660M Shift

Source: Original article