XRP Has No Financial Utility

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

In a recent commentary, Jeff Dorman, CIO of crypto hedge fund Arca, discussed the role of social and financial value in determining the price of a cryptocurrency.

As the crypto landscape grows increasingly crowded, it can be challenging to distinguish between promising projects and those that are merely hyped.

To illustrate this point, Dorman used the example of a Solana-based meme coin, $TRUMP, which was launched with no cash flows and only social value.

However, the narrative shifted when the team behind the meme coin announced that U.S. President Donald 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 event, which will take place nearly two years after the launch of the meme coin, will bring together the top 1,000 $TRUMP holders.

Prior to this announcement, $TRUMP had no financial utility, and users could not do anything with the token. However, the dinner announcement brought utility value to the meme coin.

Meanwhile, Dorman believes that XRP, despite being one of the top 10 cryptocurrencies by market cap, has no utility or financial value.

According to the Arca exec, XRP's market cap has soared to around $150 billion, and he argues that this is mainly due to social value.

“People love to hate on XRP, but it’s probably in the top 10 cryptocurrencies by market cap. At the moment, XRP has no financial utility. It has social value, which is expressed through community strength, partnerships, and the size of the ecosystem.

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,” Dorman explained.

However, he believes that XRP may gain utility through 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.

Moreover, financial value could be generated through acquisitions, such as if Ripple were to purchase stablecoin issuer Circle.

Reports late last month indicated that Ripple had bid up to $5 billion as part of an attempted takeover of Circle, but this 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 wanted, as the company currently holds over $93 billion in XRP.input: As cryptocurrency continues to gain mainstream attention, several projects are striving to provide innovative solutions in the payments and cross-border transaction domains. Among these projects, Ripple-promoted cryptocurrency XRP is often touted as a game-changer.

However, the CIO of crypto hedge fund Arca has questioned the financial utility of XRP, contrasting it with the social value that has driven the meme coin $TRUMP.

“XRP Has No Financial Utility”

Jeff Dorman, the CIO of Arca, made the assertion while discussing the role of social and financial value in determining the price of a cryptocurrency.

In a recent commentary, Dorman said that the meme coin, which is based on Solana, had only social value upon its launch, 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 U.S. President Donald 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 event, which will take place nearly two years after the launch of the meme coin, will bring together the top 1,000 $TRUMP holders.

Prior to this announcement, $TRUMP had no financial utility, and users could not do anything with the token. But the dinner announcement brought utility value to the meme coin.

Meanwhile, Dorman thinks that XRP, despite being one of the top 10 cryptocurrencies by market cap, has no utility or financial value.

According to the Arca exec, XRP's market cap has soared to around $150 billion, and he argues that this is mainly due to social value.

“People love to hate on XRP, but it’s probably in the top 10 cryptocurrencies by market cap. At the moment, XRP has no financial utility. It has social value, which is expressed through community strength, partnerships, and the size of the ecosystem.

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,” Dorman explained.

However, he believes that XRP may gain utility through Ripple's dollar-pegged stable