Bitcoin witnessed a remarkable surge during the past month, rocketing up by nearly 40% within a few short weeks. The leading cryptocurrency is now approaching the six-figure price mark, bringing joy to investors. Just like in many previous runs over the past seven years, Bitcoin seems to be the driving force behind the upward trend, with other coins such as Solana and Cardano also experiencing a boost in price, mirroring Bitcoin's success.

One of the Most Intriguing Altcoins - XRP

XRP (XRP -3.57%) stands out among the altcoins. Although it has been around since 2012 and is not a new entrant, it is gaining popularity as new investors enter the market and the regulatory headwinds that have plagued the crypto space begin to shift. So, in the midst of all the excitement, the question arises: Is XRP a millionaire maker?

XRP's Aim at the Banking Industry

XRP is the token utilized by RippleNet, a payment network designed to facilitate the movement of money across the globe. It serves as a global settlement system, currency exchange, and remittance network combined. Traditional methods often involve high costs and slow processing times. By leveraging XRP and RippleNet, financial institutions can save both time and money while better serving their customers.Some institutions are already using XRP, and it has a proven track record. It is incredibly fast, extremely cost-effective, and can handle a large number of transactions before slowing down. In the crypto world, this refers to its scalability. Compared to Bitcoin, XRP performs exceptionally well in this regard.XRP's proponents firmly believe that its real-world commercial applications give it inherent value.

But There Are Complications

At first glance, the pitch for XRP seems highly logical. The banking industry pays billions of dollars in fees each year, with approximately $193 billion in 2023. If XRP can become the standard, it has the potential to capture a significant portion of this value. However, there is a problem. The primary reason for banks to take on the risk of transitioning away from a proven standard is to save a substantial amount of money. Therefore, even if the entire industry were to switch, the revenue generated would likely be a fraction of the $193 billion.An even more fundamental issue is that XRP does not necessarily need to be adopted for banks to use RippleNet. While some specific functions require XRP, the majority of RippleNet's features can be operated using regular currency.

XRP Faces Less Regulatory Pressure

For years, one of the major factors weighing on XRP's value was its ongoing legal battle with the Securities and Exchange Commission regarding its classification. The regulator sued XRP for allegedly facilitating an "unregistered digital asset securities offering." Fortunately, the courts recently ruled in XRP's favor. Additionally, the tough-on-crypto chairman of the SEC, Gary Gensler, has announced his intention to step down in January. It is expected that Trump will nominate a crypto-friendly replacement.This development has definitely contributed to XRP's recent price explosion, but is it sufficient to make it a millionaire maker?

Analyzing the Possibilities

Before we can determine whether XRP is a millionaire maker, we need to define what that means. For the purposes of this article, let's assume that it would need to turn a $10,000 investment into $1,000,000 in 30 years. I understand that this may not be as exciting as achieving the same in five years, but our goal is to build a diversified portfolio for the long term and avoid getting rich quickly, which often leads to losses.Considering inflation, $1 million in 30 years is equivalent to only about $300,000 today. To be a true millionaire maker by today's standards, XRP would need to turn our $10,000 into $3.3 million, which is a challenging task.For XRP to achieve this, it would need to increase from its current price of $2.7 to $891, representing a staggering 33,000% return. Over 30 years, this translates to an annual growth rate of 21.3%, which is more than double the historical average of the stock market. While it is not strictly impossible, I would be hesitant to predict that it will actually happen.Let's look at it from another perspective. The combined market capitalization of the 10 largest banks is currently around $3 trillion. Assuming a generous 10% annual growth rate, it will reach $52 trillion in 30 years. Based on our assumptions, XRP would have grown to a market capitalization of $51 trillion during the same period. Do you really think it could be worth nearly the same as the combined market caps of the 10 largest banks in the world?In conclusion, I am confident in stating that I do not consider XRP to be a millionaire maker under any circumstances. Despite its recent success, I am skeptical about its long-term growth prospects given the barriers to adoption in the banking industry and its current valuation. If you are interested in crypto, I believe Bitcoin is a more prudent choice for parking your money.