JP Morgan and Wells Fargo, two of the largest banks in the United States, have announced their investments into Spot Bitcoin ETFs, unveiling their exposure to BTC, the world’s largest cryptocurrency. This significant development comes amidst the persistent downturn in the crypto market, resulting in BTC’s price dipping slightly above $60,000. 

US Financial Banks Expose Spot Bitcoin ETF Holdings

American financial services companies, Wells Fargo and JP Morgan, have revealed their exposure to BTC by disclosing their adoption of Spot Bitcoin ETFs in a recent filing. This decision to invest in BTC ETFs marks a notable change from the banks’ previous cautious approach to cryptocurrencies. 

Wells Fargo revealed in its new filing to the United States Securities and Exchange Commission (SEC) that it currently holds 2,245 shares of Grayscale Bitcoin Trust (GBTC), valued at $121,207, which it has since converted into an ETF. Additionally, the American bank holds 37 shares of the ProShares Bitcoin Strategy ETF (BITO), valued at $1,195. 

On the other hand, JP Morgan, which holds about $2.9 trillion in Assets Under Management (AUM), has revealed its total Spot BTC ETF holdings in an SEC filing. The bank reported that it had purchased about $760,000 worth of shares of BlackRock’s iShares Bitcoin Trust (IBIT), Fidelity’s Wise Origin Bitcoin Fund (FBTC), Grayscale Bitcoin Trust (GBTC), Bitwise Bitcoin ETF, and ProShares Bitcoin Strategy ETF (BITO). 

Moreover, JP Morgan also owns about 25,021 shares valued at $47,000 in cryptocurrency ATM provider, Bitcoin Depot. The investment company also unveiled its exposure to Spot BTC ETFs just hours after Wells Fargo’s announcement.

Despite the regulatory uncertainty and the market’s continuous volatility, institutional interest in cryptocurrencies, particularly BTC, has been growing rapidly. Bloomberg senior analyst, Eric Balchunas also forecasted that more financial services companies would likely follow JP Morgan and Wells Fargo’s footsteps to unveil holdings in Spot Bitcoin ETFs as market makers or Authorized Participants (APs). 

BTC Price sUFFERS More Declines

Despite the increasing interest from traditional financial institutions seeking exposure to BTC, the price of the cryptocurrency has shown a surprising lack of bullish momentum. Since its halving event on April 20, BTC has been trading sideways, witnessing continuous declines that have pushed its price down to around $57,000 previously. 

The cryptocurrency, which recorded an all-time high above $73,000 in March, has seen a 14.20% drop over the past month. Additionally, Bitcoin gave up a large portion of its gains before the halving and is currently trading at $60,494, according to CoinMarketCap. 

Blockchain analytics platform, Santiment, revealed that the ongoing lack of interest in BTC and the broader market sentiments could be a strong sign that the cryptocurrency is getting close to its bottom. 

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Wells Fargo, one of the largest U.S. banks, has invested in Grayscale’s spot Bitcoin ETF offering.

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Two wealth managers on Wall Street will support spot Bitcoin ETFs nearly two months after the products debuted on major U.S. exchanges. 

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In a recent statement, Wells Fargo’s Treasury Management officer Shannon Thorp provided an eye-catching price prediction for XRP. The forward-thinking executive anticipates a potential surge in XRP’s value to anywhere between $100 and $500 in the short term, specifically within the next 4 to 7 months. This price hike prediction represents an astounding 14,200 % to 71,400% increase from the current trading value.

Finding The Right Best Model

Thorp acknowledges the longstanding debate within the XRP community, where one faction relies solely on chart patterns and trends exhibited by Bitcoin to draw short-term price predictions. On the other hand, another group emphasizes the significance of XRP’s utility, believing that its partnerships and the replacement of antiquated systems will be the key drivers of its price. However, Thorp presents a novel perspective, emphasizing that XRP is NOT a security and basing price forecasts on traditional securities logic is counterintuitive to the original vision set forth by the Ripple team.

Expanding on her rationale, Thorp introduces the concept of Liquidity Strength (LS) as a pivotal metric to consider when predicting XRP’s future value. To ascertain a price range for the token, she takes into account the total supply, including circulating tokens, burnt tokens, those owned by banks, governments, and individuals, and assumes that Ripple has released all their XRP from escrow.

According to Thorp, if one company were to possess all 100 billion tokens, their Liquidity Strength (LS) in a price range of $1.00 to $5.00 would amount to $100 billion to $500 billion. However, she argues that such a calculation fails to consider the potential growth in the economy, messaging and settling activities, and the continuous benefits derived from using XRP.

Drawing on real-world examples, Thorp compares the token’s potential to that of SWIFT, which handles approximately 44.8 million messages per day. Even if Ripple could capture only 30% of SWIFT’s daily value, which she approximates at $7 trillion, it would result in a staggering $2.1 trillion in daily value (roughly 13.2 million messages) for XRP. Considering XRP’s quick settlement time of 1 to 5 seconds, the liquidity would indeed be present. However, Thorp highlights the challenge of conducting large transactions with limited Liquidity Strength, as it may require a significant portion of a bank’s XRP holdings.

XRP Price Prediction

To arrive at her price prediction, Thorp factors in various elements such as all global banks, burnt XRP, individual holdings, XRP distributed to large banks and creators, and tokens available on liquidity hubs and exchanges. She estimates that at any given time, there may be 50 to 75 billion XRP supporting Liquidity Strength (LS). When distributed across approximately 300 to 1000 different banks, liquidity providers, and governments, this would yield around $75 million XRP/dollars for each institution.

Taking into account J.P. Morgan as a top-tier bank with a daily transaction volume exceeding $8 trillion, Thorp postulates that even if Ripple captured only 10% of this market, which amounts to $800 billion, the existing 75 billion XRP in circulation would not suffice to move such massive sums efficiently. Thorp acknowledges that this estimation solely pertains to cross-border transactions and does not encompass derivatives, real estate, CBDCs, technical parallels, and NFTs.

With the groundwork laid, Thorp makes her price prediction, projecting XRP’s price range to be anywhere from $100 to $500 in the near short term (4 – 7 months). Her calculation is based on the Liquidity Strength (LS) scenario, where a XRP price of $100 with a supply of 50 billion XRP would yield an LS of $5 trillion, while $500 would result in an LS of $25 trillion.

According to Thorp, this valuation gives the market breathing room, allows for growth, and assures that no single entity needs to hold billions of XRP to operate daily. Furthermore, Thorp believes that a potential “flip of the switch” moment could trigger this price surge – an event akin to a re-evaluation for XRP, similar to how gold is assessed.

Notably, Thorp’s speculation sets an exciting stage for the future of XRP, albeit it is important to remember that her prediction is based on several assumptions that may or may not actualize. As always, those interested in investing should conduct their due diligence, consider multiple perspectives, and make informed decisions.

At press time, the XRP price was at $0.7074.

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