XRP has continued to trend downward as the cryptocurrency market softens overall, with the total market cap declining by over $1.3 trillion since October.
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Over the last three months, XRP has experienced a drop of over 30%, exerting pressure on market sentiment, even as some analysts claim the token’s potential extends beyond mere short-term price fluctuations.
Retail Vs. Institutional Viewpoint
Health and finance commentator Dr. Camila Stevenson argues that much of the discussion surrounding XRP overlooks how major financial institutions assess settlement mechanisms.
While retail traders often focus on chart patterns and quick profits, financial institutions prioritize a system’s ability to endure stress, transfer large amounts, and maintain functionality under challenging conditions.
Stevenson compared this to infrastructure testing, where resilience and capacity outweigh initial costs.
XRP Was Built For Flows
Per insights from her recent video discussion, XRP was designed to serve as a bridge for value transfer rather than as a speculative asset. With a fixed supply, the token cannot increase in quantity to match growing transaction volumes.
Stevenson noted that this leaves price as the sole mechanism to accommodate higher transaction volumes. Analyst XFinanceBull concurred, urging market participants to consider flows over daily price changes.
Price Alone Does Not Prove Use
Nevertheless, market dynamics still play a crucial role. XRP is traded in open markets where speculation continues to impact price trends.
An uptick in price may enhance efficiency, but it does not ensure widespread adoption. Stevenson highlighted that many institutions engage through custodians, OTC desks, and private contracts.
These transactions often occur discreetly and may not reflect sharp movements on public charts. She warned that sudden price spikes during positioning might indicate instability rather than robust usage.
Why Higher Price Helps
Stevenson posited that banks dealing in billions prefer using fewer tokens that each represent higher value. Fewer units can streamline settlements and reduce the risk of slippage during peak times.
Large financial systems typically encounter problems when funds cannot transfer or when settlement delays occur, not when prices drop. Thus, a higher XRP price might facilitate smoother transfers if volume increases sufficiently to challenge the system.
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Market Reality Remains Mixed
Despite the theory, substantial evidence of large-scale institutional interest remains scarce. Factors such as regulation, liquidity depth, and consistent access still influence whether banks engage in significant transactions.
XRP’s 33% decline in recent months demonstrates how quickly sentiment can change, even as discussions about long-term applications continue. The belief that banks favor a higher XRP price relies on potential future scaling rather than current trading behaviors.
Featured image from Unsplash, chart from TradingView
