New research from financial analysts at Valhil Capital shows that this is the case XRP price is much undervalued than what it should be. Analysts have developed pricing models that estimate XRP’s value much higher than its current price of $0.5853, possibly even surpasses Bitcoin.
According to Valhil Capital’s research article, which evaluated six different pricing models, the price of XRP should not trade for less than a dollar, but somewhere between $9.81 and $513,000.
Research into the fair value of XRP
It is common knowledge that the XRP price has slowed in recent years largely due to the ongoing lawsuit between Ripple Labs, the company behind the cryptocurrency, and the SEC. This legal uncertainty made many crypto exchanges and investors hesitant to purchase and trade XRP, leading to the cryptocurrency lagging during the crypto market’s 2021 bull run.
Unlike most cryptocurrencies, which aim to replace the traditional way of banking, XRP was designed by Ripple to help banks move money faster and cheaper than current methods. Using this transaction feature of XRP and its use as a store of value, Valhil Capital six different valuation models were created to determine the fair market value of XRP.
The first model, called the Pipeline Flow Model, considered XRP’s function as a transaction medium and a store of value, and in this case set its fair value at $3,541. The second model, the Athey and Mitchnick model, also used the transaction and store of value function to bring the current fair price of XRP to $4,813.
The next two models only looked at the transaction function. These models, called the 99-Year Golden Eagle Model and the Discounted Cash Flow Model, determined the fair market price of XRP to be $13,368 and $18,036, respectively.
Taking advantage of XRP’s function as a store of value, the final two models, called the Collaterization Model and the Quantum Liquidity Model, determined that the current fair market price of came.
Current state of the XRP price
XRP trading has since resumed on US-based crypto exchanges, as the cryptocurrency has been is not considered to be a certainty by a federal judge. Despite his challenges with the SEC since 2020, the cryptocurrency has grown to become the fifth largest by market capitalization.
Some of the fair market prices of XRP set by Valhil Capital may seem extravagant, but some resonate with current predictions And sentiment in the XRP community. Data from the chain has shown that investors in whales and sharks have increased their holdings in recent days. On the other hand, Ripple’s latest periodic release of 1 billion XRP tokens from escrow could potentially ease this ongoing buying pressure.
At the time of writing, XRP price is trading at $0.6006, up 8.94% in a span of seven days.
Token price reclaims $0.6 | Source: XRPUSD on Tradingview.com
Featured image from iStock, chart from Tradingview.com