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Mpolnet

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    XRP, Crypto Assets, DLT, Finance & Real Estate
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    United States
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    Analyst

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  1. Yessir. See the chart below for the MVRV ratio for BTC going back to 2013. The MVRV and associated price for the tops are as follow: Nov 17, 2013 the price of BTC peaked at ~$1,151 and had an MVRV of 418.7% (4.18x). On Dec 13, 2017 the price of BTC peaked at ~$16,624 (based on the below chart data) and had an MVRV of 328.65% (or 3.28x). As of Dec 9, 2020 the price of BTC hit ~$18,333 and had an MVRV of 150.09% (or 1.5x). Mind you, on June 19, 2019 the price of BTC was ~$13,017 while the MVRV ratio was 131.56% (or 1.31x). Given that the MVRV was similar in 2019 to where it is now, that could indicate we've had an influx of new buyers at higher prices, which has kept down the returns for BTC holders, on average. As a side note, you can see the Mean Dollar Invested Age metric drop in lock step with major price increases (and vice versa). Hope this is helpful!
  2. Exactly! On-chain data seems to provide various indicators of whether or not price may have room to go. Candidly, I think it shows price movement in lock step with on-chain metrics so it's more of a in the moment analysis based on a specific point in time rather than an actual forecaster. For example, looking at the MVRV metric, while it doesn't tell us when price will move (up or down) it does provide an indication of whether the price has room to move, whether it be up or down, based on historical levels of said metric.
  3. Thanks for the detailed thoughts on your views of the stock to flow model! You make some valid points - I like your thoughts on Jed's selling pressure creating a potential support line. Would be interested to see your valuation model on XRP based on demand if you're able to share
  4. Based on where the MVRV ratio peaked in the last cycle I would say we have a lot of room to run still. In 2017 we went from an XRP price of <$0.01 to ~$0.39, at which point the MVRV peaked at 1864.07% before dropping to 474.88% (which indicates holders had an 18x average profit before it dropped to 4x+ in profit on average) before finally going back up to 789.22% where price peaked at ~$3.11. As of yesterday the MVRV was at 82.94% with a quoted XRP price of ~$0.57. This tells us that on average current holders have a ~83% on their position. Past data doesn't indicate future performance but based on these metrics there's a good argument to be made that we'll exceed prior ATH. That's my opinion based solely on this on-chain data metric. Does this cycle repeat last cycle? Who knows but if it does that would mean that the MVRV ratio skyrockets, drops, then jumps again before plummeting and entering the bear cycle.
  5. Hi all, I haven't followed or posted in this thread for a while now. I recently signed up for Santiment and have started learning the metrics they calculate based on on-chain data and how it can be used to predict price movements or if an asset is under or overvalued. Having said that, I wanted to share some data I got from Santiment with this thread regarding where we may be in the cycle and how much room price has to run. Opening up the floor to comments and questions as always. Below is a chart showing the MVRV (Market Value / Realized Value) ratio for various periods during XRP's trading history dating back to 2014. This metric essentially tracks on chain data to show the average profit/loss of coins in circulation based on their current price. Based on the chart below, we can clearly see the MVRV ratio spike in-line with spikes in price. For reference, on May 10, 2017 when XRP hit a high of ~$0.39 it had a MVRV ratio of ~1864% (or 18.64x). When the price spiked to $3.11 on December 27, 2017 it had a MVRV ratio of 789.22% (or 7.89x). As of today, the chart is showing a price of ~$0.58 with a MVRV ratio of 95.67% (or 0.95x). The MVRV % or multiple indicates how much profit the average holder currently has relative to the price of the asset. Link for more details on the metric below: MVRV Metric Link: https://academy.santiment.net/metrics/mvrv/ Switching over from valuation metrics to accumulation metrics, we'll now look at Age Consumed and Mean Dollar Invested Age ("MDIA") into XRP. Below is the chart outlining the two metrics in addition to plotting price movement. The age consumed metric is essentially meant to show tokens that have been held dormant for a long time, coming back into circulation. More on this metric in the two links below. MDIA tracks the average amount of days that all [XRP] tokens stayed in their current address, adjusted for their acquisition price. As a rule of thumb, a rising MDIA slope signals a network-wide accumulation trend, while drop-offs indicate increased movement of [XRP] tokens between addresses (or movement of XRP on the network). Age Consumed Metric Links: https://academy.santiment.net/metrics/age-consumed/ https://academy.santiment.net/metrics/age-consumed/age-consumed-technical/ Mean Dollar Invested Age Link: https://insights.santiment.net/read/📢-mean-age-653 As a reference point, I thought it would be helpful to post BTC's chart showing Age Consumed and Mean Dollar Invested Age in order to paint a better picture of these two metric's and their potential effect on price. @jbjnr @JASCoder - are you guys familiar with Santiment and their methodology for calculating various metrics? I'd be happy to create and share charts with metrics you guys think may be applicable to better understanding where we are in the cycle, from a price standpoint. EDIT: Please let me know if you are unable to access the metric links. I'll add the metric explanations to this post.
  6. @jbjnr - thanks for the update and the in depth chart analysis! This is incredibly helpful. Great to see ODL volume picking up with smaller value transfers. @JASCoder - appreciate your charts as well! Wanted to ask if you are both familiar with PlanB's stock to flow valuation model? If so, I was wondering if it would be possible to use a similar methodology and apply it towards XRP? My thinking was in order to more accurately do this for XRP we would need to include a forecast for burned XRP that's then factored into the current stock (i.e existing number of tokens in circulation). We would also need to make assumptions around the future flow (i.e. future supply increases) based on the average number of XRP distributed out of escrow. Based on my understanding of stock to flow, if we can find a way to account for burned XRP and future supply increase, then we should be able to apply the same valuation methodology to XRP.
  7. "FXRP safely allows an XRP holder (an originator) to send their XRP to a set of addresses (called agents) on the XRP Ledger. The FXRP smart contracts on Flare then issue the originator FXRP on Flare which is 1:1 convertible with XRP and secured with Spark. When a holder of FXRP wishes to redeem it for XRP ( a redeemer) they send it back to the FXRP smart contracts on Flare. The agents then send the XRP to the redeemers address on the XRP ledger. If the agents don’t complete this redemption quickly enough the redeemer is compensated the value of their XRP plus an amount to compensate for transaction costs to rebuy the XRP." The above is from the following link: https://flare.ghost.io/theflarenetwork/ Yes, the network is called FXRP, with spark as the native asset that represents a peg to XRP. FRXP is the spark token back by an XRP peg - at least that's my understanding. EDIT: Sounds like FXRP is a derivative of the underlying assets. Net positive for the XRP ecosystem either way you look at it.
  8. @KarmaCoverage Thanks, I saw this video. My question was more oriented towards how FXRP would be distributed to XRP holders when the Spark network/token is launched. I'm assuming exchanges would need to serve as the middleman to distribute the FXRP tokens? EDIT: Looks like they mention working with exchanges in order to distribute the FXRP per the link provided. Thanks for sharing that. https://flare.ghost.io/theflarenetwork/amp/?__twitter_impression=true
  9. Does anyone know how the spark tokens will be distributed? Do exchanges have to list the native spark token then distribute the FXRP token to XRP holders?
  10. Didn't realize buy backs of company assets was generally categorized as a "bad" thing. Someone should call Tim Cook and tell him he's created no shareholder value through all the buybacks he's conducted Buy backs are considered back when the shares are being bought back above the intrinsic value of the underlying security. They're not bad when the intrinsic value of the underlying security is above the current market price. This a key difference hence why share buybacks can't be painted with a broad brush and classified as "bad" across the board. Determining the intrinsic value of crypto is basically impossible at this point to we can't say whether it's good or bad. If it's bad, then that means Ripple is burning operating cash flow to buy back an overvalued asset (i.e. XRP). Good would indicate they're using operating cash flow to buy back an undervalued asset, whose value will grow and create value for Ripple to further operate with. The potential positive here is less circulating supply and price support at lower levels. The potential bad here is that Ripple, the company, is spending operating CF to buy an asset that could potentially go down in value thereby eroding shareholder value for Ripple, the company, stock. Don't see how buying back XRP from the open market is a negative unless you're under the assumption that Ripple is just going to dump it all on the open market. However, I'm not sure why a company with private shares and large institutional investors would spend money on buying an asset that they then plan to crash the price of - unless your thesis is that Ripple is actively trying to bankrupt their own company.
  11. Interesting that Ripple is now providing an NVT ratio calculation. Love the way these reports are evolving to include more detail about the ecosystem. Great to see they're finally buying up XRP on secondary markets (effectively the same as share buybacks in my mind).
  12. Interesting comments from David Schwartz regarding yesterday's article from Ripple hopefully providing further clarity. Per the comments, my take is that ODL volume has primarily been comprised of treasury payments and from there the company in charge of those treasury payments sends/allocates the payouts as necessary. The main pitch of using XRP is high throughput low fees thereby making smaller payments not only cost efficient but feasible to execute (EX: sending $5 when the wire fee is $5+ - no one will take on this type of transaction). Ripple's article provided no mention that larger payments would be ignored nor did it state that large payments will never be processed through XRPL via XRP. The article highlight a new focus on the primary use case - high payment volume comprised of small $ payments. Per comment #2 below, it seems that this original use case (small payments w/ high volume) may have not been clearly proven out. Given this, Ripple may be taking a step back (who knows what the exact drivers of this business decision were) in order to prove out the use case. Most large companies won't approve investment decisions or approve internal changes to company processes without clear data points. This isn't a shift in their use case it's a refocusing effort on the primary use case to prove it out. In the long run this may attract more new clients to take advantage of a proven out use case that can add value to a business. Think uber drivers sending money from their uber account to their bank account after each ride - the current payment infrastructure doesn't allow this however, if ripple can prove their ability to make these transactions feasible and gain a % of that business then it could translate to high ODL volume. Take it as you may - just my two cents. Constructive commentary welcome as always. EDIT: Key piece of the original article from Ripple below. Sounds to me like they want to focus on more XRP use (not less) via low-value high frequency payments rather than XRP being used to move large funds from a treasury account in the US to the same companies treasury account in Mexico, which may happen less frequently. The silver lining here is that based on the ODL volume we've seen tracked by the likes of @jbjnr we can say that XRP does in fact work for Treasury type transfers and millions of dollars (USD, PHP, MXN, and AUD) have already been processed via this subset of the overall payments use case. Whether or not it's currently that much more efficient is another question and could be why Ripple is focusing on low value high frequency payments as a way to garner more liquidity such that Treasury payments becomes more efficient.
  13. @TplusZero - hoping you can provide more in depth analysis than the clever comment above
  14. This is an incredible analysis - thanks for sharing! Can you please elaborate what the % next to XRP, per the below, refer to?
  15. @Molten - looking at BTC in the $3k - $4k range. Would make my first BTC purchase ever lol but assuming PlanB’s Stock to Flow model holds up price should recover to $9k - $10k range. However, not sure how the liquidity crunch has been affecting prices aside from some liquidations on leveraged positions. Hopefully, this period marks the inflow of new capital into the space that may have been on the sidelines given where prices are. I’ve been using Bitrue to stake certain assets in their Power Piggy platform and have been reinvesting the earned interest into other tokens to build positions since they have a lot of trading pairs. VET has been great on the platform given its higher base interest rate (meaning no Bitrue token ownership is needed to get a higher interest rate). They also pay out accrued VTHO and have a BTC/VTHO trading pair helping increase earned interest. Note, I stake a certain % of total assets owned for this strategy in case anything happens to the exchange. Disclaimer: do your own research before using a new platform EDIT: I could see certain teams increasing token buybacks at these low prices but that’s just me speculating.
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