You probably know already. Last week Apple’s stock price reached 207.39 USD which means that the company is now valued at one trillion dollars. That’s twelve zeroes! This is such a high number and happens so rarely (only five other companies have achieved that in history) that it feels really unfair to consider it a simple psychological barrier.
Tim Cook, Apple’s CEO, welcomed the news with a lot of sobriety and was very careful to avoid any triumphalism, making it clear that, while the milestone is a sign of success, it’s still not the way to measure Apple’s value. He congratulated all Apple workers and reminded them that, even now, it’s time to look forward. He didn’t claim any credit for the feat, attributing it instead to the company as a whole.
After this news, Apple seems, unbeatable, dominant, colossal, and some will be tempted to think it’s eternal. In this context, it is easy to remember that Apple has faced its fair share of hard times and that many industrial giants in the USA and everywhere else have reached incredible heights only to fall down in time.
It’s also important to remember that Apple is a traditional company in that it has used conventional financial tools only throughout its history.
That’s how it was started up, and how it has carried on all along. But the business world is changing. The blockchain technology and cryptocurrencies are here to stay and slowly but surely are changing the face of the world’s financial services and ways to do business.
So, in the blockchain’s brave new world, who could be the first company to reach the trillion dollar mark? We wouldn’t be shocked if it were Ripple’s XRP crypto coin. Let’s dig a little deeper.
What are Ripple and XRP anyway?
XRP is the cryptocurrency created by Ripple Labs, which is a private company. The coin was designed with a single purpose in mind: to facilitate, expedite and secure international transactions among institutions.
It’s not meant to become a coin you can use in, say, Amazon, or eBay someday, but for banks, remittances, and all kinds of financial institutions to settle international payments. This is achieved by using XRP in tandem with Ripple’s network and platforms which are designed to do just that.
Ripple has already managed to recruit more than a hundred banks all over the world to test their tech, and some of them (Banco Santander, most notably) already has a production app to transact across borders that runs on Ripple’s platforms and crypto coin.
Ripple’s and XRP’s case is unique in the cryptosphere. This is a digital asset that was born with a mission to be useful. And it’s achieving it. And that is the key. A cryptocurrency (just like any other thing) that is indeed useful will find clients, demand, and will undoubtedly increase in value sooner or later.
Ripple now vs. Apple in 1997
The traditional finance gurus and investors are currently not that excited about XRP or Ripple. The mainstream regards them as way too risky, and they discourage investors from taking them seriously as investing tools.
That is to be expected since the traditional financial system has been very skeptic (some would say afraid too) about cryptocurrencies ever since Bitcoin was released back in 2009. But how seriously should we take that opinion?
Let’s remember that Apple faced the very same accusations when it held its IPO back in the 1980’s. So what is it? Are the people in Wall Street just too conservative? Or maybe they don’t understand at all the features and possible consequences of any new technology because they live to immersed into their world to care.
Also, why should Ripple be so risky? Traditional companies use things like debt, risk, and bankruptcy as natural financial resources to do business. The crypto world is different, and this is quite important. Going back to Apple’s history, things were not always that promising.
In 1997 Apple was bleeding money, it had lost too much of the market to Microsoft, had products that were too expensive and very few people wanted. Also, it was in debt, and the market didn’t trust it anymore. The now great company that is Apple was only three months away from bankruptcy. It was none other than Bill Gates, Steve Job’s eternal nemesis, and Apple’s most significant rival who used some of his immense fortunes to buy vast numbers of Apple shares, make the market confident again and keep the company going.
Apple’s year of bad luck is relevant because it’s unimaginable how this could happen to XRP. It has no debt, it can’t go bankrupt, it has competition but no rivals in the sense that Apple had them. And that’s because it’s not based on traditional financial systems. If you understand the technology, Ripple’s aims, and the vast strides it’s taken so far, the risk looks a lot more manageable than it was for Apple in the 80’s or in the late 90’s.
As I write this, Ripple’s XRP is valued at 12 billion by market capitalization with a value of 0.32 per token. To reach a trillion, it would need to reach a price of 16.70 USD. How likely is this?
While it’s not a sure thing by any means, it is indeed possible. Rippe is bringing a new world bank into the Ripplenet per week, on average. As more as more banks and financial institutes join the net, the demand for XRP will keep increasing thus driving an increase in price. This is already happening very slowly but steadily.
More banks will keep joining for two reasons. First, Ripple’s technology saves them a lot of time and money, and, second, because banks who have not joined yet will need to participate if they want to keep doing business with the ones who are already in, and some of Ripple’s partners are massive players (BBVA, Banco Santander, Western Union, just to name a few).
In some circles, confidence in XRP is so high that SBI’s VC trade announced just yesterday that it will be issuing XRP derivatives. So will XRP reach the trillion mark? We believe so. It won’t be very soon, but there’s every chance that it will, in time. Ripple is different from most other coins because it’s not just an abstract piece of code floating around the internet with no discernable purpose.
Ripple has already found its way into the real world, and it’s solving real and profitable problems. It’s just too useful, so while you should be careful and do your homework before you ride the XRP bus, all the conditions seem to be in Ripple’s and XRP’s favor. Don’t be surprised if, in a not too distant future, Ripple ends up being bigger than Apple.
[Image courtesy of Flicker]
Disclaimer: All information provided through this article should not be regarded as investment advice, nor should be taken for granted for crypto trading purposes. Before making any investment or trading plans, make sure to inquire about the information diligently by carrying out your very own research. Thank you.