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Owen1

Future XRP price IF mass adoption happens

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Hey guys, I am just trying to get my head around something.  Is this at all correct?  

I have heard that SWIFT sends $5 Trillion worth of money transfers PER DAY and that the banks and financial institutions actually have about $27 Trillion locked away in accounts in order to facilitate these money transactions; to be able to have the money there in order to send it.  I hold my hands up that these are just things I have heard and I am not sure about the figures - a lot of you guys out there are more knowledgeable than me and can either confirm these amounts or not. 

In order to get my head around this I am going to assume for a moment that XRP is a success with banks and gets mass adopted by them to settle payments worldwide.  Just play along for a moment and assume this.

If there are $27 Trillion sitting in accounts to facilitate payments, and they suddenly start using XRP then I am guessing the whole value of XRP that they will need to hold is going to have to be at least 27 Trillion?  if there are only 100Billion XRP units well a figure of $3 per XRP is not going to be enough is it?  So banks are going to have to purchase and HOLD massive amounts of XRP in order to have them available to use to make money transfers, and therefore the circulating supply basically will be shrunk right down for investors like you and me.  In turn this in itself will mean a price increase due to low supply and possibly more demand (good thing for banks as the value of XRP they hold will go up and they will hold the $27Trillion total that they require, and also if they buy them sooner rather than later it will cost than the $27Trillion that they are locking away right now, making it possible to use some of this money - I am just thinking out loud, I may be wrong).

So in effect 27 Trillion/100 Billion = $270.  XRP standing at a value of $270 per XRP is what it would take to cover the value of the USD$ currently being held by banks in accounts to facilitate these cross border payments or money transfers.  And this is IF the banks hold ALL the XRP that will ever exist.  So am I correct in assuming then that if XRP is adopted fully by banks that the price of XRP could in theory climb to at least $270 per XRP.? 

This is without any use by other big worldwide-known companies which may start accepting XRP as payment etc.  Obviously this may bring up the question of  "well if banks use/hold all or most of the XRP how will there be enough left for other businesses to make use of and accept as payments?". The only answer from the top of my head is that the per XRP price actually far exceeds $270 and banks will not need to have so much of it to cover the $270 Trillion needed.  For example if we double the $270 to $540 then the banks would only need half of the total supply of XRP for their own purpose and the remaining 50 Billion XRP units could be free to be used in other ways, e.g investor purchases and acceptance by big companies as payments.

As I said I may be wrong here and I am not at all giving investment advice, but if I am wrong I would love to hear why exactly. 

Thanks.

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Lol. I know I am talking in IF this and IF that.... but I am trying to apply simple reasoning by comparing the current situation with banks.

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I have taken the liberty of assuming that Ripple release all the XRP in escrow........   but if they DO NOT and everything else I have said holds at all close to being true, the price of XRP would be even higher. :-O

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We musn't forget that there is also a burn rate which means as the time and transactions go by the price will be changing as well since we will have less and less XRP available.

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It's important to take not that Banks have multiple escrow accounts for multiple fiat pairs. Because XRP will be a universal source of liquidity, the amount of XRP needed does not need to equal the value of escrow accounts at a 1:1 ratio. Which is a positive characteristic of XRP and xRapid.

Edited by nav

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29 minutes ago, Owen1 said:

So in effect 27 Trillion/100 Billion = $270.  XRP standing at a value of $270 per XRP is what it would take to cover the value of the USD$ currently being held by banks in accounts to facilitate these cross border payments or money transfers.  And this is IF the banks hold ALL the XRP that will ever exist.  So am I correct in assuming then that if XRP is adopted fully by banks that the price of XRP could in theory climb to at least $270 per XRP.? 

You are only trying to calculate ppu for cross boarder payments.  The secret sauce lies in ILP and the interoperability and trustless settlement of value between various chains, ledgers and private systems. The calculation is also assuming 100% of tokens are in circulation and are not held as a reserve currency or for speculation.  $270 is on my lowside 10 years out, but who knows, just my unqualified opinion.

Personally I think you need to take into account total global assets and figure out what the utility is worth for trustless settlement and sourced liquidity across all platforms and divide by current circulation.  

 

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3 minutes ago, Tiger said:

We musn't forget that there is also a burn rate which means as the time and transactions go by the price will be changing as well since we will have less and less XRP available.

Yes correct - that did cross my mind but thought I better leave it out in case I complicate things lol.  What do you think of the original post?

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2 minutes ago, nav said:

It's important to take not that Banks have multiple escrow accounts for multiple fiat pairs. Because XRP will be a universal source of liquidity, the amount of XRP needed does not need to equal the value of escrow accounts at a 1:1 ratio. Which is a positive characteristic of XRP and xRapid.

Of course, thanks for the input.  Does that mean the original post is inflating the price or not inflating enough?

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1 minute ago, Archive said:

You are only trying to calculate ppu for cross boarder payments.  The secret sauce lies in ILP and the interoperability and trustless settlement of value between various chains, ledgers and private systems. The calculation is also assuming 100% of tokens are in circulation and are not held as a reserve currency or for speculation.  $270 is on my lowside 10 years out, but who knows, just my unqualified opinion.

Personally I think you need to take into account total global assets and figure out what the utility is worth for trustless settlement and sourced liquidity across all platforms and divide by current circulation.  

 

Yes I assumed for now that all XRP were released just to make sense of it all..  Any help in why the original post may be incorrect is welcomed. Thanks.

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All previous price predictions for xrp over the last 18 months have been way off in terms of the price going a lot  higher than expected. I previously thought the price of xrp would reach maturity and long term stabilisation around the $200 mark, but with recent developments and price action, I think it could go way higher than that. Check out the YouTube video where it is explained how xrp is more scarce relative to Bitcoin than many think. Brad himself said that the moneygram partnership is just the first step in a marathon of developments to come. 

While I don't think we'll see the  370x we saw in 2017, I wouldn't discount a big upwards move this year. Anything can happen in crypto, and expectations are exceeded all too often. 

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All previous price predictions for xrp over the last 18 months have been way off in terms of the price going a lot  higher than expected. I previously thought the price of xrp would reach maturity and long term stabilisation around the $200 mark, but with recent developments and price action, I think it could go way higher than that. Check out the YouTube video where it is explained how xrp is more scarce relative to Bitcoin than many think. Brad himself said that the moneygram partnership is just the first step in a marathon of developments to come. 

While I don't think we'll see the  370x we saw in 2017, I wouldn't discount a big upwards move this year. Anything can happen in crypto, and expectations are exceeded all too often. 

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1 minute ago, Niall said:

All previous price predictions for xrp over the last 18 months have been way off in terms of the price going a lot  higher than expected. I previously thought the price of xrp would reach maturity and long term stabilisation around the $200 mark, but with recent developments and price action, I think it could go way higher than that. Check out the YouTube video where it is explained how xrp is more scarce relative to Bitcoin than many think. Brad himself said that the moneygram partnership is just the first step in a marathon of developments to come. 

While I don't think we'll see the  370x we saw in 2017, I wouldn't discount a big upwards move this year. Anything can happen in crypto, and expectations are exceeded all too often. 

True! I will check out the video.

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1 minute ago, Owen1 said:

Of course, thanks for the input.  Does that mean the original post is inflating the price or not inflating enough?

Although I think replacing the need for escrow accounts is a major factor in XRP's future value, I don't think that is what will drive the price into the $100's.

I think it's the sheer volume of assets transferred over the protocol (while sourcing liquidity from XRP), and bridging ledgers with ILP, that will drive the price up. 

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