Dec 15 2024, 08:58 PM, updated 12 months ago
XRP has been one of the top performers over the past six weeks, having recently reclaimed and retained the $2 level. Despite this, some commentaries suggest the altcoin still trades below its fair market value due to several factors contributing to price suppression.
Notably, last year, venture capital firm Valhil Capital compiled several models seeking to assess XRP’s fair market value under certain conditions. Interestingly, a bold valuation model, the Collateralization Model, suggests that XRP could has a fair market value of $122,580.
This evaluation sees a future where global financial systems are tokenized, and XRP becomes the foundation for collateralizing assets worldwide. Developed by Valhil Capital, the model examines the total global wealth and tokenization’s impact on XRP’s role as a store of value.
Interestingly, the Collateralization Model assumes that all global assets, including real estate, derivatives, central bank reserves, and commodities, are tokenized on the XRPL, the underlying blockchain for XRP. The Ripple CTO David Schwartz already confirmed that the XRPL is pivoting to RWA tokenization.
This ambitious scenario sees a future where blockchain technology represents the full spectrum of global wealth. Notably, the goal is to determine XRP’s value as a universal collateral asset in a highly interconnected, tokenized financial system.
Further, the methodology stresses XRP’s ability to secure assets rather than drive transactions. The model’s assumptions include full tokenization of global wealth and the use of XRP to collateralize this value.
The evaluation considers the world’s total wealth, which is estimated at $5.3 quadrillion. When it applies a 1.25x risk adjustment ratio and calculates the present value of tokenized assets, the model estimates a total tokenized economy of $6.2 quadrillion by 2030.
Notably, dividing this value by XRP’s circulating supply of 50.7 billion tokens results in the projected value of $122,580 per token.
The Collateralization Model puts an emphasis on XRP’s potential in the tokenization scene. However, challenges remain. Tokenizing all assets globally would face technological and regulatory setbacks. Moreover, unknown values not in the analysis could affect the accuracy of this valuation.
Despite these challenges, the model notes the possibility of a blockchain-based future where XRP’s value syncs with its utility. Currently, XRP changes hands at $2.4, trading far below this fair market estimate. However, this is not a price prediction but rather an analysis of XRP’s theoretical fair value under ideal conditions.
https://thecryptobasic.com/2024/12/14/colla...alue-at-122580/
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