The XRP calculator based on the Athey and Mitchnick XRP valuation model puts XRP value at $15 in the next two years based on certain criteria, such as a $40 billion volume.
XRP currently trades for $0.6246 as of press time despite its potential to revolutionize the global payments sector. As a result of its underperformance, several industry commentators have argued that the token is largely undervalued.
In 2018, Susan Athey, a Stanford professor at the time, and Robert Mitchnick, a Stanford MBA candidate at the time, introduced a research paper that sought to evaluate the fair market value of XRP as opposed to its actual market value.
The paper considered several market conditions, such as supply and demand and the technology behind the asset. It estimated XRP’s fair market value to range from a low of $6.37 to a high of $32.91. The paper also estimated that Bitcoin’s fair market value ranges from $45,438 to $93,621.
Shortly after Susan and Mitchnick released their evaluation model, a web-based calculator that uses this model surfaced. The Crypto Basic recently leveraged this calculator to estimate XRP value in the next two years, and the tool presented a price of $15.
Notably, the calculator presents the opportunity to provide projected data on six crucial XRP metrics. It then evaluates XRP’s future price based on the data provided for these metrics.
XRP Metrics Considered
The first metric is the “total estimated daily transaction volume.” This typically refers to XRP’s 24-hour volume. We provided $0.04 trillion ($40 billion) here. This figure is achievable, seeing as XRP’s highest 24-hour volume is $36.95 billion, achieved on April 6, 2021.
The second metric, “average time (in days) between transactions per one XRP,” talks about the average days that go by before market participants transact 1 XRP token. We kept this metric at the default figure, 5.
Meanwhile, the third metric, one of the most important parameters, highlights XRP’s total valuation as a store of value. We put up $0.8 trillion ($800 billion) here, representing 10% of the estimate for gold. As the fourth benchmark, we set two years as the time estimated for XRP to hit the projected volume.
For the fifth parameter, we projected XRP’s circulating supply to hit 58.8 billion tokens within this timeframe. This factor in Ripple keeps 200 million XRP in circulation every month after the 1 billion escrow release for 24 months (4.8 million XRP), added to the current circulating supply of 54 million XRP.
The sixth metric measures the average XRP interest rate for calculating the present value of future cash flows or values. We kept this at the default value of 5.
Based on these metrics, the calculator estimated that XRP would reach a price of $15.43 in two years. At XRP’s current price of $0.6246, the $15.43 value would represent a 2,370% increase.
While some of the metrics, such as the estimated store of value, could be difficult to attain, others, like the 24-hour volume, are more likely to materialize.
DisClamier: This content is informational and should not be considered financial advice. The views expressed in this article may include the author's personal opinions and do not reflect The Crypto Basic opinion. Readers are encouraged to do thorough research before making any investment decisions. The Crypto Basic is not responsible for any financial losses.
