The escrow model sets the fair market value of XRP at $122,580.
The fair market value of XRP exceeds the $122,000 price mark, according to a valuation from Valhil Capital’s escrow model.
XRP has been one of the best performing coins over the past six weeks, recently reclaiming and holding the $2 level. However, some commentary suggests that the altcoin is still trading below its fair market value due to several factors contributing to the price suppression.
Warranty Form
It’s worth noting that last year, venture capital firm Valhil Capital compiled several models that sought to assess the fair market value of XRP under certain conditions. Interestingly, a bold valuation model, the Warrant Model, suggests that XRP could have a fair market value of $122,580.
This assessment envisions a future where global financial systems are tokenized, and XRP becomes the foundation for tokenizing assets around the world. The model developed by Valhil Capital examines total global wealth and the impact of tokenization on XRP’s role as a store of value.
Interestingly, the collateral model assumes that all global assets, including real estate, derivatives, central bank reserves, and commodities, are tokenized on the XRPL, XRP’s underlying blockchain. Ripple’s CTO David Schwartz has already confirmed that the XRPL is being tokenized to RWA.
This ambitious scenario envisions a future where blockchain technology represents the full spectrum of global wealth. Notably, the goal is to establish the value of XRP as a global security asset in a highly interconnected financial system.
Furthermore, the methodology emphasizes XRP’s ability to secure assets rather than pay for transactions. The model’s assumptions include the complete tokenization of global wealth and the use of XRP to secure that value.
XRP fair market cap is $122,580
The valuation takes into account the total wealth of the world, which is estimated at $5.3 quadrillion. When applying a risk adjustment of 1.25x and factoring in the current value of token assets, the model estimates the total token economy to be $6.2 quadrillion by 2030.
It is worth noting that dividing this value by the circulating supply of XRP of 50.7 billion tokens results in an expected value of $122,580 per token.
The collateral model underscores the potential of XRP in the token landscape. However, challenges remain. Tokenization of all assets globally will face technological and regulatory setbacks. Furthermore, unknown values that do not appear in the analysis may affect the accuracy of this assessment.
Despite these challenges, the model suggests the possibility of a blockchain-based future where XRP’s value is in sync with its utility. Currently, XRP is trading at $2.4, well below this fair market estimate. However, this is not a price prediction but rather an analysis of XRP’s theoretical fair value under ideal circumstances.
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