Core Argument - The valuation debate surrounding XRP suggests it may be undervalued, with potential price targets of $5 or higher based on its growing transaction volumes and institutional adoption [1][4][24]. Group 1: Transaction Volumes and Market Dynamics - XRP processed approximately $1.3 billion in cross-border payments in Q2 2025, indicating a 41% year-over-year growth, which could lead to an annual processing volume of over $5 billion [1][2][24]. - The market capitalization of XRP is around $113 billion at a price of $2 per token, leading value investors to question if the current price reflects its real-world utility [2][4]. - The On-Demand Liquidity (ODL) network's growth and partnerships with over 300 banks support the bullish case for XRP's valuation [4][14]. Group 2: Institutional Demand and ETF Inflows - The launch of U.S. spot XRP ETFs in November 2025 attracted approximately $1 billion in net inflows within the first month, indicating strong institutional interest [7][8]. - Institutional demand is characterized by long-term allocations from pension funds and asset managers, which helps stabilize XRP's price [8][10]. Group 3: Supply Dynamics - XRP's supply on exchanges has decreased significantly, dropping from 3.95 billion tokens to 2.6 billion in just two months, a 45% decline, which creates a supply squeeze [9][10]. - Large holders, or "whales," accumulated about 340 million XRP tokens between September and November 2025, reinforcing the scarcity argument [11][12]. Group 4: Regulatory Clarity and Adoption - The SEC's settlement with Ripple in August 2025 clarified XRP's status, removing regulatory uncertainties and paving the way for broader adoption [13][24]. - More than 300 financial institutions are now utilizing Ripple's technology, processing approximately 2 million transactions per day, which enhances the case for XRP's undervaluation [14][24]. Group 5: Counterarguments - Critics argue that many banks use Ripple's technology without utilizing XRP, which limits the token's demand despite the network's success [17][19]. - The large circulating supply of XRP, approximately 57 billion tokens, poses challenges for extreme price targets, making significant appreciation mathematically difficult [20][21]. - Regulatory risks and competition from CBDCs and stablecoins could hinder XRP's adoption and demand in the future [22][23].