These 3 Numbers Show Why It's Likely for XRP to Hit $3 and Beyond

Can XRP (CRYPTO: XRP) hit $3 sometime in the next 18 months, given that its price is near $1.80 today?

I think it's more likely to happen than not, barring any major market hiccup. There are three numbers in particular that each count as a reason.

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These numbers outline XRP's paths to adoption

The first number, 10 drops, is denominated in a unit you're probably not familiar with. It's the XRP Ledger's (XRPL's) typical base transaction fee, and it's equal to 0.00001 XRP per transaction. So even if XRP's price reached $3, that fee would still be just $0.00003 -- you and pretty much anyone else can afford to pay that fee over and over, and it will never add up to be more than a negligible amount.

In fact, its fees are so cheap that they're usually lower than other dirt cheap chains, like Solana. In other words, for financial institutions that want to move money inexpensively, the network is a great choice for their needs, and if they decide to use it, they will first need to park that money on the XRPL, buying up some XRP in the process to use as working capital.

The second number is also an important one for attracting financial institutions to the network, and it's 1 XRP. The XRP Ledger requires a base reserve of 1 XRP in a wallet address, so there's a small amount that must remain locked to reduce spam. This reserve is not a toll, but it does encourage adoption, as new users do not need to prefund much of anything in their wallet to get started, and users who might need many hundreds (or even tens of thousands) of different wallets won't find the start-up costs to be prohibitive.

The third number is denominated in dollars, and it's $45. That's a common fee that people need to pay for an outgoing international wire transfer at a major U.S. bank. With a price that high, sending small amounts is a nonstarter, which likely prevents a lot of transfers that might lead to economic activity.

Using XRP slashes that cost to practically nothing, and it also ensures that the transaction takes moments instead of days.

How these numbers could eventually add up to $3

Obviously, these three numbers aren't new in XRP's history, nor do they guarantee that its price will go to $3. They're just pieces of proof that the network will have an edge in getting financial institutions to use it to manage their tokenized assets and transfer money internationally.

For these to translate into a higher coin price, there needs to be actual adoption that creates more usage of the chain, which itself needs to lead to more demand for holding XRP. Ripple, the company that issues XRP, is hard at work driving that adoption by developing new capabilities for the XRPL, and interlinking its set of financial services to it. For instance, it now issues a stablecoin native to the XRPL, which creates a capital base that institutional investors can tap for liquidity using one of Ripple's services.

All Ripple's efforts benefit from the fact that cheaper movement of capital using XRP lowers the threshold for experimentation. When paired with its commitment to developing its on-chain capital base, more users will arrive seeking to tap that capital, and with them, more demand for XRP as a transactional asset and as a liquidity tool. This investment thesis is playing the long game, as accumulating the capital base needed to attract the biggest financial companies will take quite a while.

So, is getting to $3 likely? If the network's adoption keeps compounding and attracts sustained usage, these numbers support the claim that XRP has a cost advantage big enough to thrive. Just don't expect it to happen immediately because there are a lot of other factors affecting the coin's price that could make the path slower.

Alex Carchidi has positions in Solana. The Motley Fool has positions in and recommends Solana and XRP. The Motley Fool has a disclosure policy.