Crypto commentator Zack Rector recently shared his views on the undervaluation of Ripple and the digital asset XRP despite rising valuations.
According to Rector, even with Ripple’s increasing valuation heading into 2025, the company and XRP remain significantly undervalued, presenting promising investment opportunities.
Ripple’s Implied Valuation Hits $20 Billion
For much of 2024 and since 2022, Ripple has been trading at an implied valuation of between $7 and $10 billion on platforms like Linqto. However, Rector pointed out that this figure has more than doubled, with Ripple now valued at approximately $20 billion on these same platforms.
While this upside reflects increased investor interest and optimism, Rector believes the company is still undervalued at its current price.
Rector explained that Ripple’s stock is not publicly traded on the NASDAQ or the New York Stock Exchange. Instead, the equity is available on pre-IPO private markets, primarily to accredited investors and institutions looking to gain early exposure to the company before it eventually goes public.
Ripple’s Escrow Holding: A Major Contributor to Valuation
According to Rector, a key component of Ripple’s undervaluation is the company’s XRP holdings in its escrow account. The escrow currently holds about 40 billion XRP. At the current price of $2.08 per XRP, this stash is worth around $83 billion.
Rector highlighted that when XRP was trading at $0.50 for most of 2024 and the previous years, Ripple’s escrow holdings were worth $20 billion. Accordingly, the company’s $7 to $10 billion valuation appeared mismatched, given the worth of its escrowed XRP.
Now, with XRP trading at $2, the situation has shifted notably, but it still illustrates how the company’s valuation does not reflect the full value of its holdings.
XRP Still Undervalued, Could Reach $48
While XRP’s market position has improved since last month, numerous market commentators believe the $2 price remains a steal. Analyst Ali Martinez, who recently highlighted XRP’s low valuation despite its recent 485% surge in November, predicted two lofty price targets for it.
His conservative target is for XRP to reach $8.40 and a highly optimistic target of $48 in 2025. Martinez argues that XRP’s breakout from a seven-year downtrend supports these ambitious outlooks. Greater prices for XRP would translate to a higher worth for Ripple’s escrow holdings.
Ripple’s Expanding Business and Future Growth
Beyond XRP, Rector emphasized that Ripple’s business is diversifying and growing. The company is expanding into various sectors, such as stablecoins and custody services.
Specifically, Ripple launched its own stablecoin this month. With the growing success of stablecoin businesses—such as Tether, which has outperformed financial giants like BlackRock in profit—Rector believes Ripple’s future growth potential remains substantial.