Ripple may be a great blockchain-based tech for banks, but the valuation of its XRP token reflects the unlikely hope it becomes a global reserve cryptocurrency
Kyle Samani's argument lands at the peak of XRP's late-2017 run-up: banks may adopt Ripple's technology, but the token's price only makes sense if XRP becomes a global reserve asset — a thesis he treats as unlikely. Days later, CNBC reported that Ripple and its investors hold many billions of dollars worth of XRP that is not meaningfully tied to xCurrent, the product banks actually use, and that co-founder Chris Larsen's combined tokens and equity were briefly worth around $59.9 billion.
That gap between token value and product utility became the organizing fact of Ripple's next decade: the company sat on $16B in XRP and rebranded itself as the 'Amazon of payments', while by late 2025 its equity — not the token — traded at a $22B-$30B private-market valuation after several acquisitions. Samani's own firm, Multicoin Capital, was later profiled as one of the funds trading this utility-versus-speculation spread profitably.
First-order effects
Investors holding XRP are exposed to a reserve-currency narrative rather than to bank adoption of xCurrent, which CNBC's reporting showed generates no meaningful claim on the token — making the valuation a bet on a scenario, not on usage.
Second-order effects
Ripple's own strategy bends toward the token: sitting on $16B in XRP, it pushed an 'Amazon of payments' expansion beyond cross-border settlement, effectively managing the company to justify the asset on its balance sheet.
Third-order effects
If the pattern holds, crypto companies split into two priced assets — an equity whose value tracks the software business and a token whose value tracks speculative narratives — forcing investors and regulators to decide which one actually represents the company.
The trend: Crypto valuations are increasingly set by reserve-asset narratives detached from product revenue, leaving companies like Ripple to manage the gap between their token's story and their actual business.
XRP is a valuable revenue generator for the company. It fuels the investment in what really matters: competing against and replacing SWIFT. But it looks like there's been too much of a good thing. And profiting off the irrational exuberance of retail investors is no bueno.
FWIW, I'm willing to bet that Ripple leadership is in full blown crisis mode over this spike, scraping employee and investor comms for any insinuation that XRP was getting adopted by financial institutions. The crash will open them up to an unbelievable amount of legal risk.
I reckon new investors ask me about Ripple more than any other currency. I think it's the red herring of low price per coin. I'm always struggling to explain the economics of why XRP is virtually worthless, now I'll send them this by @KyleSamani http://www.forbes.com/...
“XRP has two uses: to pay fees on the Ripple network, and as a “bridge currency” for value transfers between any two institutions that don't have a trusted relationship. However, its native token, XRP, is simply not necessary for the network to function.” https://www.forbes.com/.…
Not really because Ari already knows that neither #Bitcoin nor #XRP can be frozen. IOUs issued on the @Ripple network can be frozen, but that doesn't sound scary enough and no use pointing out how much more complex Ripple is compared to Bitcoin. That doesn't fit the narrative.
Despite ridicule, I'm a longtime supporter of $XRP. Intentional FUD prevented many of you from enjoying this year's 30,000% increase. Support whatever you believe in, but please remember that nobody has your best interest in mind but you. 2018: Sincerity/positivity > Criticism ht…
People seem to have a problem w/ using Total Supply for MCap, Why? 1. #Ripple is a Centralized Token Created by 3 guys. There is NOTHING preventing them from selling all to exit scam. 2. Satoshi's #Bitcoin r way less likely to ever Trade + Lost Coins, but yet they count in MCap?
1/ XRP: earlier today I posted a graphic from the Ripple company's website about the “freeze” features on the XRP ledger with little additional comment. XRP cannot currently be frozen, this feature only applies to other assets in specific circumstances.
I work at @bbva and we are already piloting XRP for international wire transfers between Mexico and Spain. @santanderuk is doing the same. However, it's only a pilot to not be left behind and it's not looking like a solid protocol for the way it settles payments.
You should know you're not piloting XRP then. Santander is piloting RippleNet. Fiat routes using interledger and trusted intermediaries. No XRP required.
No one ever got around to solving Ripple's biggest incentive problem: the fact that one group controls *nearly all* of the XRP. What a hot potato that is!! All of the controllers will eventually be cashing out, abandoning the project, and fleeing for their lives.