David Schwartz Says His “XRP Can’t be Dirt Cheap” Comment Came from a Payment PoV

The Ripple CTO Emeritus, David Schwartz, recently stressed that his “XRP can’t be dirt cheap” comment came from a payment point of view.

Schwartz, former CTO at Ripple, has again explained his long-held view on XRP’s price and how it relates to its use in payments. He addressed the topic amid renewed discussions about why XRP still trades at a relatively low price despite its growing use.

Key Points

• David Schwartz clarified that his “XRP cannot be cheap” statement was about payment efficiency, not a price prediction.
• The comment originally came from November 2017, when XRP traded at $0.24.
• Schwartz explained that higher XRP prices allow the same total payment value to move with fewer tokens, reducing market impact.
• The latest clarification comes on the back of concerns around XRP’s low price despite growing utility.
• XRPL validator Vet emphasized that some have misquoted the comment as a price prediction.

“XRP Can’t be Dirt Cheap”

The latest clarification followed an inquiry presented by investor Lisa Prager. She called attention to his earlier statement that XRP cannot be cheap and questioned why the asset still appears “cheap” despite developments such as GTreasury settling trillions last year, along with the introduction of XRP ETFs. 

In his response, Schwartz said many people misunderstand his earlier comment. This is they see it from the perspective of an XRP holder. He explained that his original statement focused on XRP’s role in payments, not on its value as an investment.

Essentially, when institutions use XRP to move money, what matters is the total value they are transferring, not the number of XRP tokens involved. A higher price means fewer tokens will be necessary to move the same amount of money. 

This can make transactions smoother and reduce the chance of affecting the market price during large transfers. Essentially, Schwartz’s point was about efficiency in payments, not about predicting that XRP may reach a certain price.

The Original 2017 Comment

In his latest post, Schwartz directly quoted the original comment from November 2017, which he made when XRP traded at $0.24. At that time, he explained that XRP could not logically remain extremely cheap because the cost of sending money stays the same regardless of the token’s unit price. 

For instance, sending $1 million would require either 1 million XRP at $1 each or just 1 XRP at $1 million. In both cases, the total value remains $1 million.

He also explained that higher prices can make payments easier to handle. Schwartz used Bitcoin as an example, noting that when the coin traded at around $300, large transactions could move the market too much and become costly. 

As Bitcoin’s price increased, it became easier to carry out large transactions without causing major price swings. This helped show why a higher price can improve how an asset works for payments.

Persistent Community Scrutiny

While Schwartz made this comment over eight years ago, investors have continued to reference it. Just four days before this latest discussion, another XRP community member asked him to explain what he meant. Responding, Schwartz said, all else being equal, a higher XRP price makes it cheaper to use for payments.

Adding to this, Vet, an outspoken XRPL validator, said people often misinterpret the comment. He explained that some take it as a price prediction. However, he stressed that the point mainly centered on XRP’s utility in payments.

Right now, XRP trades at about $1.32, which is a 445% increase from its $0.24 price in November 2017. This suggests that the current price is already enough to support the payment volume happening today. If transaction volumes increase significantly, the price could adjust upward to meet this demand.