Ripple-promoted cryptocurrency XRP is often touted as a game-changer for payments and cross-border transactions.

ypto hedge fund Arca, however, has questioned the financial utility of XRP.

Crypto hedge fund Arca's CIO Jeff Dorman has questioned the financial utility of Ripple-promoted cryptocurrency XRP, despite it being often touted as a game-changer for payments and cross-border transactions.

In a post on X, formerly Twitter, Dorman said that U.S. President Donald Trump’s meme coin, $TRUMP, is the perfect token to understand crypto valuations.

The token, which is based on the Solana blockchain, launched in April with only social value as there were no cash flows and users could not do anything with the token. However, the game changed after the team behind the meme coin announced that President Trump is set to host an exclusive gala dinner at the Trump National Golf Club in Washington, D.C., for top $TRUMP holders on May 22.

This announcement added utility value to the meme coin.

Meanwhile, he noted that XRP, which is one of the top 10 cryptocurrencies by market cap, has no utility or financial value yet.

According to Dorman, XRP’s market cap has soared to around $150 billion mainly due to social value.

“It's one of the most discussed coins & everyone seems to have an opinion on it (hence the social value). No one can do anything useful with it yet (hence no utility value) & it's not clear what the cash flows will be (hence no financial value). Yet it's still in the Top10 by market cap.”

However, social value is becoming utility value with Ripple’s dollar-pegged stablecoin, Ripple USD (RLUSD), which was deployed on the company’s institution-focused XRP Ledger and Ethereum blockchain in December 2024.

“Social value is real, but quantifying that value is impossible. Utility value is a little easier to measure, but still hard. When a token is useful, you can estimate how much it’s worth to use, and therefore estimate demand.”

XRP could also add financial value in the future through acquisitions, for instance, if Ripple purchases stablecoin issuer Circle.

Reports late last month indicated that Ripple bid up to $5 billion as part of an attempted takeover of Circle, which was rejected as being too low.

Bitwise president Teddy Fusaro suggested at the time that Ripple could buy a lot of crypto companies if they want, as the company currently holds over $93 billion in XRP.