The analyst explained that market cap is simply the last traded price multiplied by a cryptocurrency\u2019s circulating supply<\/a>, which is a snapshot of overall trading activity and not a reflection of how much money is required to achieve a certain price. He noted that the common criticism that market capitalization represents the amount of money invested in an asset is inaccurate.\u00a0<\/p>\n One reason Crypto_Luke believes the market cap argument is flawed<\/a> is that it fails to account for how XRP operates. Unlike assets designed primarily for storing value, such as BTC, XRP is designed for rapid liquidity and settlement across global corridors<\/a>. He stated that XRP can be used multiple times in a single day, facilitating transactions without requiring additional capital. As a result, he suggests that XRP\u2019s price is determined by its \u201cactively traded float,\u201d rather than by the total supply that is idle.\u00a0\u00a0<\/p>\n In his analysis, Crypto_Luke emphasized that liquidity and price adjustments go hand-in-hand in XRP\u2019s design. He explained that assets that move quickly through settlements allow the blockchain network to satisfy demand without requiring equivalent dollar-for-dollar backing. As XRP\u2019s transaction volume increases, its price naturally adjusts to reflect the value of its utility rather than a fixed market cap.\u00a0<\/p>\n The analyst noted that XRP\u2019s supply was intentionally designed to be large, fixed, and non-reissuable. This structure supports a multi-trillion-dollar liquidity pool and enables the network to handle high-volume settlement throughput.\u00a0<\/p>\n More recently, XRP faces additional downward pressure, as CMC data shows that the cryptocurrency\u2019s market capitalization has crashed by nearly 10%. As of writing, XRP\u2019s market cap has fallen to approximately $79.25 billion following a massive decline in its price over the past 24 hours.\u00a0<\/p>\nXRP Market Cap Crashes Nearly 10%<\/h2>\n