Ripple’s RLUSD Stablecoin: Why It Could Cost More Than $1 Initially

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Ripple’s highly anticipated stablecoin, RLUSD, is set to launch in 2024, and the crypto community is buzzing with excitement. As the release date approaches, there are growing expectations, especially within the XRP community. While many are eager to get their hands on the new stablecoin, Ripple’s CTO, David Schwartz, has shared some important advice for potential buyers.

Why RLUSD Might Cost More Than $1 Initially

One of the key points Schwartz raised is that the RLUSD stablecoin might experience temporary price surges when it first launches. This is because, during the early stages, there could be a supply shortage. Some buyers may be willing to pay more than the intended $1 value, especially if they want to be among the first to own RLUSD. For example, during early trading, RLUSD was priced at 511 XRP, which equated to $1,231—much higher than the $1 target.

Schwartz explained that this spike in price is not a sign of long-term value but a temporary situation. When a new asset is launched, especially a stablecoin, there can be an imbalance between supply and demand, which leads to price fluctuations. These spikes are not unusual, but they should not be mistaken for an opportunity to profit. Schwartz reassured that once the market stabilizes, the price will return to $1.

Analyst warns FOMO Possibility

Ripple’s CTO strongly advises against buying RLUSD out of fear of missing out (FOMO). He emphasized that the stablecoin’s main purpose is to maintain a consistent $1 value, and any price movement above that is likely due to supply issues or short-term demand. Schwartz cautioned that if someone is willing to spend a lot of money to buy a tiny fraction of RLUSD early on, they should not expect to make a profit from it.

He also mentioned that profit-taking traders—who exploit price differences in different markets—will quickly help to correct any price difference, bringing RLUSD back to its intended $1 price point.

A Promising Future for Stablecoins

Despite the early price fluctuations, Schwartz believes in the long-term potential of the stablecoin market. Ripple sees RLUSD as a credible player in the space, and with stablecoins becoming increasingly popular, Schwartz predicts the market could surpass $2 trillion by 2028.

In short, while the launch of RLUSD might bring some short-term price fluctuations, the stablecoin’s purpose is to maintain stability. Buyers should be patient and avoid buying in a rush, as the price will stabilize once the supply and demand balance out.