XRP is the biggest victim of the multi-year Ripple vs. SEC litigation, leading experts to believe its price should be much higher than it is now.
Jimmy Vallee, MD at Valhil Capital, and Molly Elmore, Valhil Capital’s Blockchain Businesses CMO, recently published a comprehensive two-year research Whitepaper. The study aimed to ascertain the fair market valuation of XRP, revealing that its fair value spans from $3.5K to $22K.
Elmore shared the Whitepaper through her official Twitter handle, further highlighting the crucial points surrounding the research.
What is the fair market value of XRP?
This question is more complex than it sounds, and led a small group of people on a nearly 2 year journey, picking up more along the way to support the effort.
🧵 A thread about our whitepaper to determine the Fair Market Value of XRP. pic.twitter.com/SSb9q5liXG
— Molly Elmore (@mollyelmore22) June 7, 2023
The Whitepaper is the product of an evaluation of XRP’s true worth using six models, namely:
- Pipeline Flow Model.
- Athey and Mitchnick Model.
- 99-Year Golden Eagle Model.
- Discounted Cash Flow Model.
- Collateralization Model.
- Quantum Liquidity Model.
The study also aims to expose the damaging effects of the SEC lawsuit.
Included in the research are variables such as Global Transaction Volume, Daily transaction value, XRP circulating supply, XRP transactions per second, etc.
The SEC Lawsuit and its Effects on XRP
Following the US SEC’s legal action against Ripple regarding the sale of XRP, a chain reaction of sell-offs and delistings ensued, significantly affecting the price of XRP. Jimmy Vallee observed distinct elements within the case that sparked skepticism regarding the true intentions behind the lawsuit.
In response to these developments, Valhil Capital sent a proposal to the Federal Reserve, suggesting the sale of its XRP at a price exceeding the current market value. This move aimed to highlight the potential presence of “regulatory capture” and prompt a discussion on its implications.
This raised logical questions about the financial damages caused by the SEC’s lawsuit and the hindrance it posed to the adoption of XRP’s intended use case, sending Valhil Capital on a quest to determine XRP’s fair market value.
What is XRP’s Fair Market Value?
To further explore this notion, Valhil Capital formed a Confidential Committee. In late 2022, a smaller Valuation Committee comprising quantitative and financial valuations experts was established.
Over several months, the Valuation Committee developed six different valuation models to determine XRP’s fair market value.
Fair market value refers to the estimated value of an asset based on various factors, including market conditions, supply and demand, and other relevant considerations. It differs from market value, which is the current price of the asset in the market. Notably, the market value is typically affected by external factors such as favorable or unfavorable news.
Elmore clarified that the estimates from the six models were not future price forecasts for XRP but rather assumptions of what the asset’s price would have been if the SEC lawsuit had not occurred.
The results of the valuation models show that, excluding outliers, XRP’s fair value ranges from $3.5K to $22K. The lowest value is a 668,604% increase from XRP’s current price, while the highest is 4,203,186% higher than the current market price.
This result underscores the significant impact of the SEC lawsuit, as numerous institutions that could have potentially utilized XRP had to refrain from doing so to mitigate legal risks. However, it is crucial to acknowledge that these estimates are subject to differing opinions and criticisms from certain quarters.