With gold recently seeing new ATHs, how high would XRP price go if the market witnessed a 5% capital rotation from gold to XRP?
While the broader crypto market has faced bearish pressure, leading to price struggles for Bitcoin (BTC) and altcoins like XRP, gold has been an excellent performer. Notably, the precious metal has been soaring to new all-time highs since last week, with the latest peak coming up this Monday.
Gold Hitting New Highs
With this impressive performance, gold recently became the first asset to claim a $30 trillion market cap. At press time, gold’s price per ounce has corrected slightly below $4,200, leaving it with a market cap of $28.8 trillion. Despite this, the asset has outperformed gold and the rest of the crypto market over the past few days.
Amid the difference in performance between gold and Bitcoin, leading asset manager Bitwise recently evaluated how much the BTC price will rise if investors trigger certain allocations from gold to the firstborn crypto. According to its findings, even just a 5% allocation from gold to Bitcoin would push the BTC price from $107,240 to $242,391, a 126% increase.
XRP Price if There’s a 5% Allocation from Gold to XRP
Against this backdrop, we chose to evaluate a similar capital rotation but for XRP. Notably, being a much smaller asset, nearly 15x smaller than Bitcoin, a similar allocation from gold to XRP would push its price much higher and deliver better gains for XRP holders.
For context, with gold having a market cap of $28.8 trillion, 5% of this figure translates to $1.44 trillion. Interestingly, this alone is miles larger than XRP’s current market cap of $145.7 billion.
If the 5% allocation from gold enters the XRP market, XRP’s valuation will increase by a massive $1.44 trillion. Such a boost would push XRP’s market cap to $1.586 trillion, possibly making it the second-largest crypto asset in the world if Ethereum (ETH) and BNB do not see a comparable increase in size.
Considering XRP’s circulating supply of around 60 billion tokens, the $1.586 trillion valuation would push the price of XRP to $26.4. Such a price would represent a 943% increase from XRP’s current value of $2.43. Essentially, this confirms that just a 5% capital allocation from gold to XRP would boost the XRP price by 943% to $26.4.
While such a capital allocation may appear impractical, some analysts believe the $26 price for XRP is not out of reach. For instance, market watcher EGRAG has persistently suggested that XRP could rally to $26. Specifically, last October, EGRAG set XRP price targets of $9.3, $16, and $26, citing his standard deviation model.
DisClamier: This content is informational and should not be considered financial advice. The views expressed in this article may include the author’s personal opinions and do not reflect The Crypto Basic opinion. Readers are encouraged to do thorough research before making any investment decisions. The Crypto Basic is not responsible for any financial losses.