Crypto expert Jack has drawn attention to a valuation model that puts the XRP price at $18,000. This is based on the discounted cash flow model, which focuses on the XRP ledger utility and XRP’s role as the native token.
Valuation model that puts the XRP price at $18,000
In one X messageJack revealed that the discounted cash flow model is the The fair value of the XRP price for $18,036. He noted that the world is rushing into tokenization and the momentum is unstoppable. Based on this, he predicts that trillions of dollars of capital could flow into the XRP Ledger, powered by real-world assets (RWAs).
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The valuation model showed that the XRP Ledger can be viewed as a ‘pipeline of value’, where the value passing through the network can be viewed as cash flow in a traditional business system. This could give a boost The utility of XRPpotentially bringing the XRP price to $18,000.
Interestingly, there is also the possibility that the fair value of the XRP price is higher than $18,000 based on this discounted cash flow model. This could happen if economic growth rates are higher once crypto adoption drives new businesses and economic models. These new companies and economic models could lead to that increased adoption for XRP and a subsequent price increase.
In particular, cryptocurrency adoption, especially in traditional finance (TradFi), is on the rise, driving XRP adoption. This includes the launch of several XRP ETFs, which is positive for the XRP price. Meanwhile, Ripple has expanded its business with the increase in cryptocurrency adoption. This includes the acquisition of the main broker Hidden Roadwith the crypto company already exploring how to include XRP products on the platform.
Community responds to price prediction
The XRP price valuation model sparked backlash among XRP community members. Member of the community XR noted that valuation models project extreme prices that often depend on perfect conditions that rarely exist. The community member added that tokenization on the XRPL may indeed bring large capital inflows, but claims this will not dictate real value.
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Instead, XR stated that adoption, regulation and liquidity depth will determine the true value of the XRP price. The community member further noted that sustainable growth will always follow verified utility.
Meanwhile, another one declared community member XRP may not necessarily be used for the trades even if trillions are traded on the XRP Ledger. They added that XRP will be used to pay for gas fees, but it will not be the currency used for transactions. As such, the trillions flowing into the XRPL may not have much of an impact the XRP price.
At the time of writing, the XRP price is trading around $2.2, down more than 4% in the last 24 hours. facts from CoinMarketCap.
Featured image from Freepik, chart from Tradingview.com