Despite the impressive performance of digital assets across the board this year, XRP has stayed rather quiet. Subsequently, many investors have begun to express concern over its ability to compete. However, in a post to X (formerly Twitter), Ripple CTO David Schwartz discussed why ‘gradual appreciation’ will be the catalyst to increased XRP gains in the long term.
Schwartz engaged with a user questioning the term that Schwartz and Ripple have placed on XRP as an asset. In his response, he identified the idea of gradual appreciation as the basis for all evaluations in terms of its development. Subsequently, he expressed this as the precursor to why the digital asset could be in line to grow exponentially in value.
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Ripple CTO Explains Gradual Appreciation, and Why Its So Important For Ripple
Since the start of 2024, the digital asset market has faced a massive boom. Bitcoin has seemingly led the way, reaching $73,000 earlier this month. For many investors, this performance has led to questions regarding XRP. Specifically, in terms of why the asset does not appear to be mirroring the impressive trajectory of something like BTC.
In a post to X, Ripple CTO David Schwartz explained the process of ‘Gradual appreciation’ regarding XRP. Moreover, he explored the idea and its fundamental connection with the digital asset. As a whole, he concisely explained why its gains may be hard to see now, but are certainly nearing.
Showing a chart of Bitcoin’s 12-year performance, Schwartz said “Long-term behavior is that of gradual appreciation. When evaluating things like [automated market makers] AMMs or staking, I generally evaluate them as an alternative to long-term holding which gives you this long-term gradual appreciation.”
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“I realize that in the moment of a bull or bear market, it does feel like long-term gradual appreciation,” Schwartz added. However, he did assure that there is no assertion that those outcomes will cement the asset’s future performance. Altogether, these processes challenge the inherent volatility in the asset class.
“Digital assets have a lot of volatility. AMMS let you turn that volatility into yield, get yield from making markets, and reduce your risk of losses to long-term price decreases,” Schwartz stated. Altogether, he affirmed that these developments have immense potential for the future of XRP. Specifically, their development, and long-term approach, will help it weather the storms of the inherent volatility in the long run.