The XRP price (XRP-USD) is depressed, leaving many investors wondering why the token remains so sad even as Ripple expands like crazy across the global financial world. The XRP token price fell over two percent overnight, dropping down to a market price of $1.30. This sudden market dip comes even though its creator, Ripple, has spent three years winning court cases and signing up global banks. While the core Ripple business is growing fast, the XRP price remains trapped far below its old high point of $3.65. A popular market theory called the North Star thesis explains why these major Ripple business wins do not automatically make the XRP token price shoot up.
Ripple Builds Networks while XRP Demand Stalls
The main reason for this price gap is that the Ripple company and the XRP digital token are completely separate things. Ripple is a private business that uses the XRP token as a quick bridge tool to move money across global borders for its banking customers. When a bank moves money, it buys the XRP token and sells it just a few seconds later in another country. Because the XRP token is bought and sold almost instantly during these transactions, it fails to build the lasting buying pressure needed to push the market price higher.
Another big problem for investors is the massive pool of XRP tokens waiting to enter the market. The Ripple company still locks up nearly half of the entire XRP token supply in storage accounts, releasing up to one billion XRP tokens every single month. This constant wave of new supply puts heavy pressure on the market and keeps the XRP price moving sideways. Even though large financial institutions like Evernorth Holdings is starting to store the XRP token as a reserve asset, this acts more as a price stabilizer rather than a trigger for massive XRP trading rallies.
Future Catalysts Could Help XRP Break Out of this Slump
For the XRP price to break out of this slump, several major changes need to happen at the same time.
First, Wall Street needs to launch official XRP exchange-traded funds that bring steady streams of new cash into the XRP token asset. Second, Ripple money movement corridors must grow large enough to create permanent demand that outweighs the massive monthly XRP token supply drops. Finally, the Ripple business needs a total end to its legal battles with government regulators so American banks feel safe using XRP’s technology.
At the time of writing, XRP’s price is sitting at $1.2994.
