The US dollar index (DXY) has fallen by more than 10% year-to-date. Ripple’s XRP token, on the other hand, has seen a price increase of 4.81% year-to-date. XRP’s price even breached the $3 mark earlier this year in January before facing a dip. Many expect XRP will prove to be a better hedge against inflation than the USD.
Why XRP Could Be A Better Hedge Against Inflation Than The US Dollar
One significant reason why Ripple’s XRP token is a better hedge against inflation than the US dollar is its finite supply. There will only ever be 100 billion tokens. About 59 billion XRP tokens are in circulation right now. The USD, on the other hand, has no fixed supply cap. The central bank can print new money whenever it seems fit.
XRP also operates on a decentralized network. This means that there is no central authority. The dollar’s value could change according to US monetary policies. Factors like government spending or quantitative easing play a significant role in the US dollar’s value.
The popular crypto has also seen a sharp increase in demand for global cross-border payments. Several banks in Japan have adopted the XRP Ledger for cross-border settlements. We could see a similar pattern emerge in the US after the SEC clarifies the crypto regulatory scenario.
Also Read: Will XRP Be Affected by the SEC-Ripple Lawsuit?
There are also several spot XRP ETF applications awaiting approval at the SEC. There is a high probability that we will get an ETF sometime this year. Many have speculated that an XRP ETF could make a debut as early as July 2025.
Despite the coin being a top choice for many, it is unlikely to outshine the dollar anytime soon. The US dollar has a track record for being a safe haven in times of distress. With global tensions high, the dollar could once again prove to be the asset of choice for many around the world.
Credit: Source link
