Why It Could Cost More Than $1 Initially
Ripple’s highly anticipated stablecoin RLUSD is set to launch in 2024, and the crypto community is excited. As the launch date approaches, expectations are growing, especially within the XRP community. While many are eager to get their hands on this new stablecoin, Ripple’s CTO David Schwartz said: shared Some great tips for potential buyers.
Why RLUSD could initially cost more than $1
One of the key points Schwartz made was that the RLUSD stablecoin may experience a temporary price spike when it first launches. This is because, in the early stages, there may be supply shortages. Some buyers may be willing to pay more than $1 of expected value, especially if they want to be among the first to own RLUSD. For example, in early trading, RLUSD was priced at 511 XRP, equivalent to $1,231, well above the $1 target.
Schwartz explained that price spikes are not a sign of long-term value, but rather a temporary condition. When new assets, especially stablecoins, are launched, there can be supply and demand imbalances that can lead to price fluctuations. These spikes are not uncommon, but they should not be mistaken for profit opportunities. Schwartz assured that once the market stabilizes, the price will return to $1.
Analysts warn of possibility of FOMO
Ripple’s CTO strongly advises against buying RLUSD due to fear of missing out (FOMO). He emphasized that the main purpose of stablecoins is to maintain a stable value of $1, and any price changes above that value may be due to supply issues or short-term demand. Schwartz warned that if someone is willing to spend a lot of money to buy a small portion of RLUSD early on, they should not expect to profit from it.
He also mentioned that profitable traders taking advantage of price differences in different markets will soon help correct any price differences, bringing RLUSD back to its expected $1 price point.
The bright future of stablecoins
Despite early price volatility, Schwartz believes in the long-term potential of the stablecoin market. Ripple sees RLUSD as a reliable player in the space, and as stablecoins become more popular, Schwartz predicts the market could exceed $2 trillion by 2028.
In short, while the launch of RLUSD may bring some short-term price fluctuations, the purpose of the stablecoin is to maintain stability. Buyers should remain patient and avoid rushing into purchases, as prices will stabilize once supply and demand are balanced.
