Ripple CTO's Take: Why Higher XRP Prices Make Payments Cheaper

David Schwartz, former Chief Technology Officer (CTO) at Ripple, has long maintained a position that often confuses the crypto community: XRP cannot remain at extremely low valuations. The reasoning behind this stance isn’t about price speculation—it’s rooted in network economics. According to Schwartz, lower XRP prices actually increase the cost of using the network for payments and value transfers, a counterintuitive insight that challenges common misconceptions about cryptocurrency pricing.

The Counterintuitive Math Behind Price and Transaction Efficiency

The CTO’s core argument revolves around a straightforward economic principle: when XRP trades at minimal levels, users need significantly more tokens to transfer the same amount of value. This creates friction and inefficiency at scale. Consider the mathematics: if XRP is priced at $1 per coin, you’d need approximately 1 million tokens to move $1 million across the network. However, if XRP were valued at $100 per coin, the same $1 million transfer would require only 10,000 tokens. The difference is substantial. For large payment corridors and enterprise use cases, deploying millions of XRP units can trigger market impact and slippage concerns. Higher valuations, by contrast, reduce the token volume required for settlement, making transactions more efficient and cost-effective. This relationship between price and operational efficiency is fundamental to Schwartz’s position on XRP’s utility.

How Current Market Conditions Validate the Theory

As of February 2026, XRP is trading around $1.50, demonstrating gradual appreciation from its 2024 lows below $0.40. This price movement aligns with the CTO’s earlier observations about the connection between valuation and network utility. The increasing price correlates with improved liquidity conditions in XRP markets, which directly translates to cheaper and more efficient payment channels. According to Schwartz, this relationship isn’t coincidental—deeper liquidity typically accompanies higher price levels, ultimately reducing the real cost of moving value across the network. Lower prices, conversely, strain market depth and require more tokens per transaction, increasing friction for institutional and high-volume use cases.

An Unchanged Position From Ripple’s Former CTO

It’s worth noting that Schwartz’s stance has remained consistent since his initial remarks in 2017. In July 2024, when XRP traded below $0.40, he reiterated that his core position on XRP’s inability to remain “dirt cheap” hadn’t wavered. The CTO has also clarified that he avoids making definitive price forecasts, acknowledging past instances where crypto asset valuations exceeded even optimistic projections. Bitcoin’s early milestones and XRP’s performance across market cycles demonstrate that price discovery in blockchain assets often defies conventional expectations. Schwartz’s contribution to this debate focuses squarely on utility rather than speculation: higher XRP valuations reduce friction, enhance liquidity depth, and lower the economic cost of cross-border value transfer—the core mission of Ripple’s bridge asset technology.