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XRP Price Projections Based on Volume Scenarios

XRP Price

The valuation of XRP has been a topic of considerable discussion within the crypto community, especially with the ongoing legal battle between Ripple and the U.S. Securities and Exchange Commission (SEC), which has undoubtedly affected its market performance. As the case enters the appeal phase, there are rising speculations about XRP’s true value and whether external factors are suppressing its price. However, some industry experts have developed frameworks to estimate its fair market value, one of which was created at Stanford’s Graduate School of Business.

The Valuation Framework

Stanford professors Susan Athey and Robert Mitchnick designed a model that evaluates XRP’s potential value based on transaction volume, frequency, and discount rates. The model, which has since evolved into a calculator, estimates the fair pricing of XRP under different volume scenarios, giving a clear picture of its price trajectory should adoption increase and transaction volumes rise.

XRP Price Projections for Different Volume Scenarios

Using the fair valuation calculator, we can estimate XRP’s market value under various daily transaction volumes: $40 billion, $120 billion, and $250 billion. Here’s a breakdown of each scenario:

  1. At $40 Billion Daily Transaction Volume With a daily transaction volume of $40 billion, the calculator estimates XRP’s value at $2.43. This price is slightly higher than its current trading price of $2.29, indicating that XRP’s value could see a modest increase even at this volume. The calculation assumes that XRP transactions are occurring every 12 hours on average, with a 1% interest rate for discounting future value to the present.
  2. At $120 Billion Daily Transaction Volume In a scenario where daily transaction volume increases to $120 billion, the fair value of XRP rises to $3.10. This would indicate significant growth, although it would still fall slightly below its 2018 all-time high of $3.31. This scenario assumes a two-year timeline for reaching such transaction levels, suggesting that with sustained adoption, XRP’s price could surpass its previous highs.
  3. At $250 Billion Daily Transaction Volume The most optimistic scenario forecasts a daily transaction volume of $250 billion, with the calculator estimating XRP’s value at $4.17. This would represent a substantial increase from the current price level, potentially signaling a shift toward XRP being viewed as a digital store of value similar to gold. This projection also assumes a two-year timeframe, suggesting that with broad adoption and continued market growth, XRP could reach this level of transaction volume and valuation.

Key Assumptions and Considerations

These projections rely on several assumptions, including transaction frequency, the time needed to reach these transaction volumes, and a 1% interest rate used to discount future value to present terms. Additionally, the model takes into account the potential for XRP to serve as a store of value, akin to digital gold, which would significantly boost its market position.

Currently, XRP’s daily trading volume is approximately $3.5 billion, according to CoinMarketCap. During its most recent rally in November 2024, its daily volume peaked at $22.6 billion. While this is far below the projections of $40 billion, $120 billion, and $250 billion, it demonstrates that XRP has the capability to reach higher volumes if adoption increases and utility expands.

Conclusion

The fair valuation projections for XRP under different transaction volumes provide insight into the potential price trajectory of the token. Should XRP’s utility and adoption continue to grow, achieving higher transaction volumes could drive its price upwards, potentially surpassing previous highs. While external factors like the ongoing legal case still pose challenges, these projections highlight the long-term potential for XRP’s market value to increase significantly, especially if it can break into higher transaction volume ranges.

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Sakamoto Nashi

Nashi Sakamoto, a dedicated crypto journalist from the Virgin Islands, brings expert analysis and insight into the ever-evolving world of cryptocurrencies and blockchain technology. Appreciate the work? Send a tip to: 0x4C6D67705aF449f0C0102D4C7C693ad4A64926e9

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