A bill recently gained clearance in the U.S. state of Utah to create a strategic crypto reserve, and market commentators are speculating on how XRP could qualify for the initiative.
Notably, last week, the Utah House of Representatives passed the HB230 bill, which allows the state treasurer to allocate up to 5% of certain public funds to crypto assets.
With this clearance, the bill now moves to the Senate for further approval. It would ultimately need the governor’s signature to become law.
Asset Investment Eligibility Criteria
Meanwhile, the bill sets specific criteria for digital asset investments. In particular, a qualifying crypto asset for state investment must have a market cap of over $500 billion on a 12-month average.
Based on this criterion, only Bitcoin, which has maintained a trillion-dollar market cap for several years, qualifies for Utah’s strategic reserve.
Other top-ranking crypto assets, like Ethereum and XRP, fall short of this threshold. For instance, Ethereum has a market cap of $317 billion, while XRP is much further behind at $140 billion.
Price at Which XRP Qualifies for Utah Crypto Reserve
For XRP to qualify, it would need to add $360 billion to its current market cap and maintain that for the next year.
According to Fred Rispoli, a well-known pro-XRP lawyer, XRP could qualify at a unit price of $5.
However, some community members pointed out that at $5, XRP’s market cap could still fall below the $500 billion threshold, especially when considering the 57.76 billion circulating supply. Indeed, at $5 with this supply, XRP’s market cap would be $288.81 billion.
However, Rispoli argued that the correct estimation should account for XRP’s maximum supply of 99.98 billion tokens, which would place XRP’s fully diluted market cap at approximately $500 billion.
Essentially, XRP must maintain a price above $5 for the next year for its total market cap to stay above $500 billion and qualify for government investment from Utah.
On the other hand, using the widely adopted circulating supply metric of 57.7 billion XRP, the unit price would need to rise above $8.65 to achieve a market cap above $500 billion.
Argument over required XRP price
XRP in U.S. Reserve
Looking at the broader picture, XRP enthusiasts are hopeful about the asset’s inclusion in the U.S. federal government’s proposed crypto reserve.
However, this proposal is still in the exploratory phase, with no clear decision on whether the government will ultimately pursue the creation of a strategic crypto reserve.
