New research from financial analysts at Valhil Capital suggests the XRP price is far undervalued than what it should be. Analysts have developed pricing models that put the value of XRP way higher than its current price of $0.5853, possibly even surpassing Bitcoin.
According to the research paper from Valhil Capital, which evaluated six distinct pricing models, XRP’s price should not be trading for less than a dollar but somewhere between $9.81 and $513,000.
Research on XRP’s Fair Value
It’s been well established that the XRP price has been held back over the past few years in large part 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 buy and trade XRP, leading to the cryptocurrency being left behind during the 2021 crypto market bull run.
Unlike most cryptocurrencies, which aim to replace the traditional method of banking, XRP was designed by Ripple to help banks move money quicker and cheaper than current methods. Using this transaction function of XRP and its use as a store of value, Valhil Capital created six different valuation models to determine XRP’s fair market value.
The first model, called the Pipeline Flow Model, considered XRP’s function as a mode of transaction as well as a store of value, putting its fair value in this case at $3,541. The second model called the Athey and Mitchnick Model, also used the transaction and store of value function to put XRP’s current fair price at $4,813.
The next two models looked at the transaction function alone. These models, named the 99-Year Golden Eagle Model and the Discounted Cash Flow Model, determined XRP’s fair market price to be $13,368 and $18,036, respectively.
Using XRP’s function as a store of value, the last two models, called the Collaterization Model and Quantum Liquidity Model, determined XRP’s current fair market price to be far above the price of Bitcoin, putting it at $122,580 and $513,518 respectively.
Current State Of The XRP Price
XRP trading has since resumed on US-based crypto exchanges, as the cryptocurrency has been deemed not to be a security by a federal judge. Despite its challenges with the SEC since 2020, the cryptocurrency has grown to become the 5th-largest in terms of market cap.
Some of XRP’s fair market prices determined by Valhil Capital might seem extravagant, but some of them resonate with current predictions and sentiment in the XRP community. On-chain data has shown that whale and shark investors have increased their holdings in the past few days. On the other hand, Ripple’s latest periodic release of 1 billion XRP tokens from escrow could potentially reduce this ongoing buying pressure.
At the time of writing, the XRP price is trading at $0.6006, up by 8.94% in a 7-day timeframe.
Token price reclaims $0.6 | Source: XRPUSD on Tradingview.com
Featured image from iStock, chart from Tradingview.com
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Author: Scott Matherson
