by Jake ClaverBack from ETH Denver, and the timing of what’s unfolding feels almost too perfect to be coincidence. Everything I’ve been talking about for months is lining up right now. Permission DEXs went live on the XRPL this morning. That’s the final piece institutions needed to facilitate payment flows on the mainnet. Oil jumped 6% today. Gold is climbing. The catalyst everyone’s been waiting for is moving into position.
The Infrastructure Is Complete
Permission DEXs represent the last major infrastructure component for institutional adoption of the XRPL. We now have digital identity, credentials, permissioned domains, and permissioned DEXs all operational. What this does is allow banks and institutions to transact on the mainnet using zero-knowledge proofs, creating private permissioned ecosystems where you need credentials to view transactions.
I don’t know how much better it could get for banks. You can call XRP the banker’s coin if you want. I’m fine with that. It’s what will facilitate commerce between counterparties, institutions, and enterprises on the backend of markets. But we need price first. Price comes from supply and demand, just like anything else. Once it reaches a high enough level, they can leverage the network and the asset to settle transactions across all the markets it’s integrated with on the backend.
At XRP Community Day last week, Monica Long said 2026 would be the year for institutional adoption of the XRPL at scale. Later that same day, David Schwartz stated that the main opposition to banks holding large amounts of XRP has been volatility. They need a high, stable price. For Monica to make that statement and David to follow up with his comment, I feel very confident they both know it needs to be a high stable price this year for that adoption to happen.
Middle East Tensions and the Reverse Carry Trade
Things are escalating between Israel, Iran, and the US. The US sent another aircraft carrier into the region. There’s the threat of closing the Strait of Hormuz, which would cut off oil supply to Japan. That raises energy costs there, forcing the Bank of Japan to raise interest rates to offset inflation. And then everything unwinds at scale.
They will need a liquidity buffer for the FX market. They will need real-time backend settlement for the stock market. The president of NASDAQ, SEC Chair Paul Atkins, and the New York Stock Exchange have all talked about distributed ledger technology for settling the backend of the stock market. We know Project Ion was finalized in August 2022 using R3 and the DTCC, creating a real-time settlement mechanism for clearing houses and brokers.
Recently, R3 came out and said they’re using Solana for security and consensus. I know that causes some people concern. But R3 is not using Solana for settlement. Security, consensus, and settlement are very different things. The chains of the future will be interoperable. We’re moving into a multi-chain world. Shout out to Jinfinity for his interview with the R3 CEO where they covered this distinction.
Why XRP Has Regulatory Clarity
We need the Clarity Act for most tokens to be used at scale. XRP already has clarity here in the US from the lawsuit with the SEC and Ripple. On July 13th, 2023, the judge ruled that XRP in and of itself is not a security. Caroline Pham at the CFTC spoke with Ripple frequently, and XRP being listed with the USD pair on Bitnomial alongside Bitcoin and ETH pretty much designates it under the CFTC’s purview as a commodity.
Does it become a supranational currency? Are markets priced in drops? Is it a tier-one asset? I think all those things will happen, but we need to see a much higher price for XRP first. Once it starts being backed by the global economy, with all large-scale transactions and markets using it to settle, it becomes riskless. It’s backed by global commerce, a protocol that settles everything at scale on the backend of markets.
The only way it stops being a riskless asset is if the global economy collapses and money stops moving. That won’t happen when they move to real-time settlement. This makes it the safest place to hold your money if you believe that’s what it’s going to be. That’s my personal belief. I’m not here to convince you one way or the other. Do your own research. I’m just some guy on the internet talking about how I allocate my capital.
Supply Shock Mechanics
Permission DEXs going live this morning, combined with escalating geopolitical tensions, creates the conditions for a supply shock. Institutions need to drive liquidity into the asset. When the reverse carry trade unwinds, XRP needs to be at a price where it can handle the order flows required to pull the system out of a global liquidity crisis.
We’ve already seen ETFs start buying XRP off the market, creating the supply shortage needed to drive demand and push price to where it needs to be. People ask why BlackRock hasn’t launched their ETF yet if they want to get in low. It’s not about retail buying. They don’t care where retail buys it, as long as it aggregates liquidity and produces the outcome they want.
If you draw attention too early or roll out factors slowly instead of all at once, you won’t achieve the price needed for them to actually start using it. That’s the outcome they’re looking for. It’s timing. It’s strategic. I believe it’s coordinated. You can argue against that, but I’ve seen too many coincidences that make me think they’re not coincidences.
Institutional Custody and Wealth Management
At Digital Wealth Partners, we serve about 3,000 clients today providing access to institutional custody at Anchorage, the same place BlackRock holds all their assets. You get the same security as BlackRock, insured up to $100 million. The fund we launched has been operating for almost a year now. It’s paid out about 5% in cash over that duration while holding XRP in institutional custody and covering all fees.
The funds don’t have guaranteed performance. They’re volatile. Sometimes they underperform. There have been months where it was down significantly. There have been months like the end of 2024 where the fund was up 18% in one month. If we see another meteoric rise in XRP because of a supply shock, I expect they’d be able to capitalize on that, and those participating in the fund will benefit from that price action.
The yield product is still in the works. I think it will come soon after we see things move. That may be what our partners are waiting on. I’m hopeful that if things move, we’ll see the yield product live for our clients in the near future. It’ll be a monthly distribution inside institutional custody, covering all costs with returns in your pocket.
R3, Project Ion, and Backend Settlement
Recently, R3 announced they’re using Solana for security and consensus. That’s not settlement. You can use multiple protocols to accomplish different things. It doesn’t have to be all or nothing. R3 has had private permissioned ecosystems built for five or six years that settle through XRP over the mainnet using digital identity, credentials, permissioned domains, and now permissioned DEXs.
David Schwartz has been talking about zero-knowledge proofs. They’ve implemented this already. It’s viable and available for the reverse carry trade, and the timing is remarkable. Permission DEXs went live this morning, and now we have everything playing out in the Middle East.
At Swell 2023 in Dubai, the mantra was custody. Ripple said custody was the bedrock, the underlying infrastructure required before banks and institutions would even look at leveraging this technology. Those problems have been solved over the past two years. They’re in place. They’re ready to go on the XRPL.
Ripple’s Strategic Position
With their banking license acquisitions last year, Ripple is in a position to force other banks’ hands. Other institutions will have to move, or Ripple will take so much market share they’ll drive them out of business. They’ll have to leverage this technology too, which continues to add value to the network and the token.
Dollar Cost Averaging vs. Catching Falling Knives
A lot of people are trying to time the bottom right now. I’m not a fan of trying to catch a falling knife. I’ve bought XRP at 17 cents. I bought XRP at $3.20. It’s not going to matter to me when XRP is $1,000, $10,000, or $100,000. I get that people want more. But that percentage move between $1.40 and $1.20, how much more XRP are you really getting? Maybe 10% more, a little more than that.
I don’t know what the volatility will look like when all this plays out. I would rather be holding it in institutional custody, safe and secure, not dealing with volatility on exchanges or other brokerages. Those things tend to go down during market volatility. Coinbase is notorious for that.
Time in the market beats timing the market. People trying to call bottoms or tops, I don’t play that game. If you want to play that game, go watch Blockchain Backer. He’s been spot-on with a lot of his calls over the past five years. He’ll tell you he’s not always certain, and I like that about him. He’ll say here are the couple ways it could play out.
For me, I don’t want to miss it. I would rather be a little early and have a little less, be in when it takes off, than try to catch a falling knife with half my capital out waiting for lower prices and miss the upside. Every time I’ve been greedy in my life, it has bit me. Poor mindset people won’t learn from other people’s lessons. They have to learn themselves and repeat the same mistakes. People that do well learn from their own lessons. The most successful people I’ve seen learn from other people’s mistakes and don’t make them to begin with.
Estate Planning and Asset Protection
Setting up an LLC and a trust structures things the right way to mitigate creditor risk and taxes. You get the full breadth of tax code inside an LLC. It needs to be a reasonable corporation with a proper corporate veil, meeting minutes, all the things we provide if you work with us.
We set things up in Wyoming for strong creditor protection, charging order protection, no state taxes, and the most progressive legislation when it comes to digital assets. You also get anonymity. Your name and address aren’t on any public documents because of attorney-client privilege. As you become wealthier, you become a target. People will sue you for anything if they think they can get money.
Post-price appreciation, you can still do this. You can transfer your assets in at the basis to the LLC and not deal with tax implications. If you’re doing a single-member LLC that’s a disregarded entity, it’s not a taxable event either way. You just want to denote the basis you bought the assets at so they maintain that basis inside the LLC.
Here in the United States, you get $30 million you can gift out of your taxable estate over your lifetime. That may increase while Trump is in office. But if you had 200,000 XRP and it goes to $1,000, you’ve got $200 million. Thirty million won’t cut it. You’ll need to structure that, get it into an intentionally defective grantor trust or use philanthropic structures to have long-term benefit without a 40% estate tax when those assets move to your heirs.
What Comes Next
We’re here at ETH Denver for XRP Community Night tonight, then Rafe Fentes’ event tomorrow, and I’m speaking at ETH Denver on Friday. The infrastructure is complete. Permission DEXs are live. Oil is moving. The catalyst is in motion.
I feel like Michael Burry. I’ve been wrong for a while, right? There’s been a culmination of events that needed to take place to get to this point where all of this could play out, orchestrate the supply shock, drive the price, and use utility to back it and hold it at a high level. We’re almost two years in. That was about the time when Burry was finally right. He started betting against the housing market in 2006, and a lot of his investors wanted to pull their money out. They thought he was crazy. Then he made $40 billion off those bets.
I don’t want there to be collateral damage. I’m praying for the people in the Middle East, in Iran and Israel. I hope we don’t escalate this to World War III. I don’t think it needs to be. I think we just need the Strait of Hormuz shut down in anticipation for this to happen. That’s all we need for everything to roll out, and I actually think it will prevent a larger war. This was negotiated a long time ago, in my personal opinion. I’ve just seen too many coincidences that lead me to believe that’s the case.
The dominoes are lined up. Everything is in place. XRP is going to come out of this looking very good, and we’re going to see significantly higher prices to handle the order flows they need to pull themselves out of a global liquidity crisis as the reverse carry trade unwinds. Whether that happens in the next few days, weeks, or months, the infrastructure is ready. The regulatory clarity is there. The institutional adoption Monica Long talked about for 2026 requires a high stable price, and all signs point to that happening this year.