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.
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.
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:
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.
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.
Get the latest Crypto & Blockchain News in your inbox.