The price-to-sales ratio is used to assess the potential of an investment, with lower ratios signaling more attractive opportunities.
The XRP token’s price-to-sales ratio is nearly double that of Nvidia, one of the most traded stocks on the market.
XRP $0.62 token has a price-to-sale ratio of 61.689, while Nvidia has a price-to-sales ratio of 37. This ratio is calculated by dividing a company’s market capitalization by the company’s revenue or total sales over the past 12 months. The lower the ratio, the more attractive the investment.
Ripple’s XRP ledger generated over $583,000 worth of network fees in 2023, according to Messari. In comparison, Nvidia generated $26.97 billion in revenue during 2023, according to its 2023 fiscal report.
The XRP token rose 0.15% in the 24 hours up to 10:30 am UTC, to $0.6205, with a $34 billion market capitalization, according to CoinMarketCap data.
Nvidia shares were down 0.49% in pre-market trading to $898.25, according to Yahoo Finance data.
Nvidia is the world’s largest semiconductor chip manufacturer and the third-largest company in the world, with a market capitalization of $2.25 trillion.
The firm reported a 265% year-on-year increase in revenue amid rising global demand for artificial intelligence (AI) equipment.
The XRP price rose 20.55% over the past year, while Nvidia’s share price rose over 241%, mainly driven by increased global demand for semiconductor chips widely used for high-level AI models.
XRP/USDT and NVDA/USD, one-year chart. Source: TradingView.
What is holding the XRP price back?
The XRP price has been under increased pressure since December 2020, when the United States Securities and Exchange Commission (SEC) sued Ripple, its CEO Brad Garlinghouse and its co-founder Chris Larsen, alleging that the firm raised $1.3 billion in unregistered securities offerings through XRP token sales.
The lawsuit received even more interest in July 2023, when Judge Analisa Torres ruled that XRP was not a security but only in regard to programmatic sales on digital asset exchanges.
The judge also ruled that XRP is a security when sold to institutional investors, which meets the conditions of the Howey test.
According to a March 25 court filing, the SEC proposed Ripple pay a total civil penalty of $1.95 billion, based on Ripple’s “defiance of the law” in continuing to sell XRP after legal warnings.
