Despite a recent pullback, the last 12 months have been very kind to XRP (XRP -1.54%), a popular cryptocurrency that has seen its value more than triple over that time period. While the token is trading close to its all-time highs, you'd be mistaken to believe current levels represent the height of XRP's potential. In fact, according to the chart below, there could be significantly more upside.

XRP could eventually be worth trillions

A great way to value a potential investment is to measure its total addressable market, more commonly referred to as its TAM. In a nutshell, this exercise essentially tells you how much the business could be worth if it controlled 100% of its end market. TAM, then, is a wonderful way to understand the maximum opportunity set that a company or asset is attempting to penetrate.

For XRP and the closely related Ripple service, the primary market is cross-border payments and remittances. Fund transfers across distinct jurisdictions today can be a complex, costly, and time-consuming process. Ripple's solution -- a blockchain-based payment network -- is designed specifically to handle these transfers in a transparent and efficient manner.

According to data from FXCintelligence, "The entire wholesale and retail cross-border payments market had a total addressable market of $194.6 trillion in 2024 and is forecast to reach $320.2 trillion by 2032."

Source: FXCintelligence

After a brief pullback, XRP's total market cap now sits just above $200 billion. The market it's trying to penetrate, meanwhile, is worth nearly $200 trillion today, with a double-digit annual growth rate expected through 2032. It's foreseeable, then, to someday see XRP valued in the trillions of dollars.

Of course, for XRP to be worth several trillion dollars, it will need to take a significant share of the cross-border payment and remittance market. That has yet to occur, arguably due to regulatory fears from big banks about partnering with cryptocurrency projects. But if you're a believer in the technology as well as long-term adoption, the numbers suggest plenty of upside for XRP.