Private equity investment firm Valhill Capital has published a research paper suggesting that the fair value of XRP is significantly higher than the current market price. Despite its important role in cross-border payments and its potential to disrupt traditional finance, the XRP coin has faced price pressure, trading at $0.5759, down 82% from its all-time high in January 2018.
XRP coin is underperforming
In the current pre-bull market phase, XRP has lagged behind other major cryptocurrencies such as Bitcoin, Ethereum, and Solana. Many attribute this underperformance to prolonged price suppression, and some initially blame the legal battle between Ripple and the SEC. Even after reaching regulatory clarity in July 2023, XRP’s price struggles continue, which is partly attributed to Ripple’s consistent XRP escrow releases and sales. To shed light on the disparity between XRP’s market price and its perceived fair value, Valhill Capital combined information from six different valuation models in its research paper.
Models and predictions
1. Pipeline Model – $3,541: Envisioning a scenario where a significant portion of global currency volume shifts to the XRP Ledger, this model predicts a fair market value of $3,541.
2. Athey and Mitchnick Model – $4,813: This model predicts that XRP will capture 10% of the global market for cross-border payments and foreign exchange transactions by 2030, projecting a fair market cap of $4,813.
3. 99-Year Golden Eagle Model – $13,386: Focusing on XRP as a medium of exchange, this model does not assume any holding or hoarding behavior and predicts a fair market value of $13,386 in 99 years.
4. Discounted Cash Flow Model – $18,036: Treating XRP as a cash-generating asset, this model projects a fair market value of $18,036, accounting for expected future cash flows from its use cases and applications.
5. Collateralization Model – $122,580: This extreme model, which assumes global money is tokenized on the XRP Ledger, suggests a fair market value of $122,580.
6. Quantum Liquidity Model – $513,158: Considering XRP as a liquidity asset that supports financial stability, this model predicts a fair market value of $513,158.
Estimates range from $9.81-$513,000
Valhill Capital’s research paper highlights varying opinions on the fair market value of XRP, with estimates ranging from $9.81 to $513,000. While each model has its own unique approach, the consensus is that XRP’s current market price is significantly below its potential fair value, indicating significant future growth potential.
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