Is This Cryptocurrency a Potential Millionaire-Maker?

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Key takeaways

XRP needs 1,000x gains to turn a 1,000 dollar investment into 1 million dollars.
Achieving those gains would create an implausible market capitalization of 80 trillion dollars.
A lifetime token supply of 100 billion caps the fully diluted valuation potential.

For years, XRP (XRP +0.95%) has captivated crypto investors with its potential for creating life-changing wealth. Since it started trading in 2013, XRP is up a truly mind-boggling 23,000%.

Some investors think XRP still has much higher to go. XRP is currently trading for just over $1, but some think it could soar as high as $100 or even $1,000. If that's the case, then XRP could be a millionaire-maker, given its potential for exponential gains.

Evaluating the math behind million-dollar returns

To determine whether XRP is a real millionaire-maker, it's important to check that the math works. To turn a modest $1,000 upfront investment into $1 million, for example, XRP would need to deliver 1,000x gains.

Unfortunately, that's not very realistic. Right now, XRP has a market cap of approximately $80 billion. If it were to soar in value by a factor of 1,000x, then it would have an implied market cap of $80 trillion. That's nearly 50x the current market cap of Bitcoin. It's 6.5x the combined market cap of Nvidia, Apple, and Space Exploration Technologies. In short, $80 trillion is a big number.

At one time, investors thought Ripple, the company behind the XRP token, might find enough use cases for XRP to justify such a valuation. However, it's no longer clear that XRP has the type of catalyst that can generate those 1,000x gains, especially with the failure of comprehensive crypto legislation (the Clarity Act) to pass in Washington, D.C.

Making matters worse, stablecoins are now taking on some of XRP's roles and functionality, which is really just a bridge currency. Even Ripple realizes this, and has been promoting the use of Ripple USD, a stablecoin that it launched in December 2024 as a potential alternative to XRP.

Understanding the factor keeping a lid on prices

There's one factor that makes any 100x or 1,000x price gains extremely unrealistic for XRP: a lifetime token supply of 100 billion. On a fully diluted valuation (FDV) basis, XRP becomes a $1 trillion asset as soon as it hits a price of $10. For XRP to go any higher, it would need to soar past Bitcoin in market cap, and that's not going to happen anytime soon.

For that reason, I'm eliminating XRP from my list of potential millionaire-maker cryptocurrencies. It might be able to generate 10x gains for investors, but a climb beyond that is just too unlikely. The big gains in XRP have already been made over the past decade, and it's time to look elsewhere for upside.

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