Financial pundit Vandell Aljarrah recently offered a straightforward analysis of how the growing utility of XRP could drive its price higher.
Aljarrah’s insights highlight the crucial role of liquidity and institutional adoption on XRP’s market dynamics. Moreover, it argued the impact of Ripple Payments (formerly On-Demand Liquidity (ODL).
Liquidity: The Driving Force
Aljarrah emphasized that liquidity remains a central factor in driving asset prices during bull markets and will continue to do so in the long run. However, he points out that the increasing utility of XRP will bring more liquidity into the system, creating sustainable growth over time.
Institutional Adoption to Shrink Public Supply
Furthermore, Aljarrah also noted that institutional adoption is one of the most significant factors in XRP’s price increase. He speculated that financial institutions adopting XRP for transactions will likely hold onto the asset rather than trading it. He expects the action to reduce the supply available to retail investors.
Notably, XRP’s total supply is capped at 100 billion tokens, of which over 12 million XRP have been permanently destroyed. This reduced availability and growing institutional demand are expected to push prices higher.
On-Demand Liquidity and Expanding Liquidity Pools
Furthermore, the finance commentator cited Ripple’s payment service, previously known as On-Demand Liquidity (ODL), which facilitates real-time transactions by unlocking capital. This Ripple’s service is believed to contribute significantly to XRP’s potential price increase.
Aljarrah noted that as liquidity pools expand and handle trillions of dollars, the demand for XRP will increase, further driving its value.
However, Ripple has openly stated, particularly during the height of the recently concluded lawsuit, that its payment service using XRP has zero direct impact on XRP’s price. This is because the system is designed to be demand-neutral, meaning it cannot by itself influence XRP’s price movements.
Despite this clarification, XRP analysts continue to argue that Ripple’s payment system plays a role in propelling XRP’s value over time.
Ultimately, basic supply and demand principles are at the core of Aljarrah’s analysis. He expects that XRP’s finite supply and anticipated growth in utility, institutional adoption, and liquidity solutions will trigger substantial price growth.
