A short while ago, a report came out from Satis group about the future of cryptocurrencies. According to the report, Satis group expects Monero (XMR) to emerge as one of the biggest winners in the next 5 years, hitting a valuation of over $18k. Interestingly, the report also singles out a number of projects that they believe will be pretty much worthless in the next 5 years. One of them is XRP (XRP). Their argument is that in the future, only cryptos that tackle offshore deposits will thrive. Basically, cryptos that allow people to hide money. However, a critical review of the report quickly exposes its fallacious nature.
First, it states that Ripple (XRP) is misleadingly marketed, and has no utility value. This can’t be the case because XRP is gaining widespread adoption in the banking sector. There is really nothing to hide or hype about the fact that XRP is gaining in adoption. It is just the way it is. It is a fact that there has been an upsurge in the number of financial institutions moving to adopt XRP, as a liquidity tool in cross-border transactions.
The fact that these cases of adoption are reported as they come doesn’t come anywhere close to exaggerated or misleading marketing. On the aspect of utility, if XRP (XRP) did not have any intrinsic value, no financial institution would be adopting it. The banking industry is one of the industries with the deepest pockets in the world. This means that most banks have the capacity to research the crypto markets and determine whether XRP (XRP) is indeed worth it or not. As such, the fact that they are adopting it means that they can see its value. Besides, the banking industry is one of the most regulated industries all across the world. If by any chance XRP (XRP) was a shaky technology, one that could pose a systemic risk to the banking sector, no bank would touch it, let alone testing it.
Second, the report elevates privacy coins and their value in taking over the offshore deposits market. But in elevating them, this report fails to take cognizance of the fact that privacy coins are at a huge risk of being cracked down by governments in a coordinated global swoop. Why would that happen? Taxes! Governments need transparent financial systems and have always needed them for purposes of taxation. Without the ability to collect taxes, governments would be unable to deliver on crucial services, and that would be a societal catastrophe. As such, sooner or later governments will start to crack down on privacy coins since they are perfect conduits for tax evasion. This happened in Japan sometime back, where major exchanges delisted privacy coins at the behest of the Japanese government. Such a move at a global level could send such coins underground, and hurt their valuations.
That’s not to say that coins like Monero (XMR) will disappear, but their mainstream growth potential would be significantly curtailed if governments make a move on them. As such, coming up with predictions that a privacy coin could hit over $10k, while a coin (Ripple XRP) that offers a real utility goes to zero is a bit of a stretch.