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Mark Phillips Believes XRP Was Designed To Be $10,000/XRP

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I'm 99% certain that 99% of that video is fluff. I think he bases the value on the "1.2 quadrillion dollar derivitives market" which he expects XRP to take 100% of naturally. No reality in this stuff whatsoever.

Edited by Archbob

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"As a former student of finance at undergrad and grad levels, this whole argument drives me NUTS!  This may have been posted here before (I apologize if so) but it is one of the best explanations as to why comparing coin market caps to real company equity market caps is so ridiculous.  Even more ridiculous is to compare a coin cap to a country's GDP or some fraction of another currency (like US notes in circulation v. US denominated assets).

I know not everyone can always read WSJ articles so I am summarizing my own interpretation in my own words below (quoted when necessary).

https://www.wsj.com/articles/stop-talking-about-bitcoins-market-cap-1513015626

 

First, the underlying conclusion here is that a coins value is a lot more like the ASSET value of a global financial institution...not the value of it's owners equity position.  If you were to look at the books of Ripple, Inc...I am quite sure the company's XRP holdings would be in the ASSET section of the balance sheet.

This is actually something I have been considering writing. It is sooooo spot-on when it comes to the market cap debate. Funny thing is, the article is attacking BTC folks that brag about market cap...it covers all the basis - apples and oranges to compare to a real profit-producing company's market cap.

BTC (or any coin itself) is not a profit producing company. So what if BTC market cap is bigger than Citigroup's - a better comparison would be to compare to Citigroup's ASSETS...which is $1.8 trillion. For VISA, don't compare market cap, compare daily transactions (337k vs. 468 million) at a minimum.

Then comparing a coin market cap to national GDP figures (often done when folks argue a price cant go there) is "like comparing two random numbers".

When comparing bitcoin market cap to any established global financial institutions correctly, BTC is still a "small fry".

So, onward and upward XRP Market Cap!!!! The comparison to currency is also flawed because it often only considers physical notes in circulation - probably should consider total US denominated assets....$220 Trillion.

Some other TOTAL ASSET valuations of well known financial institutions:

JP Chase:  2.56Trillion

BofA: 2.28 Trillion

Wells Fargo $1.9 Trillion

 

Food for thought " courtesy @meegwell xrpchat.  

I thought this was relevant,  one of the best explanation of market cap I've read on this forum. :good:

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I really do think crypto market cap should be listed as a capitalization rate, which is used in real estate. How big is one's 'land' value in terms of 'area'/use case it is in vs. what's the price per asset multiplied by circulation. There could be a rare estate which has a supply of 1 somewhere in the world that sells for $10M. That doesn't mean the market cap of that single estate should be recognized as $10M. There would be far more 'value' for that estate.  

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Usually a Capitalization Rate for a property where the owner generates a Gross Income is less Taxes, Maintenance, and Insurance, which results in Net Income. If you divide Net Income/Purchase of Property Price for that property you get a Cap Rate, which can be displayed as a decimal or a percentage.

What I'm saying @Professor Hantzen is that the $10,000 per XRP truly is dependent on actually the 'addition' of taxes, maintenance, and insurance, of the net income of value transfer (being the property). That's where the these trillion $ valuations might be feasible if you are adding all of the ecosystem together to support the property of XRP.

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4 hours ago, Truckdriver said:

"As a former student of finance at undergrad and grad levels, this whole argument drives me NUTS!  This may have been posted here before (I apologize if so) but it is one of the best explanations as to why comparing coin market caps to real company equity market caps is so ridiculous.  Even more ridiculous is to compare a coin cap to a country's GDP or some fraction of another currency (like US notes in circulation v. US denominated assets).

I know not everyone can always read WSJ articles so I am summarizing my own interpretation in my own words below (quoted when necessary).

https://www.wsj.com/articles/stop-talking-about-bitcoins-market-cap-1513015626

 

First, the underlying conclusion here is that a coins value is a lot more like the ASSET value of a global financial institution...not the value of it's owners equity position.  If you were to look at the books of Ripple, Inc...I am quite sure the company's XRP holdings would be in the ASSET section of the balance sheet.

This is actually something I have been considering writing. It is sooooo spot-on when it comes to the market cap debate. Funny thing is, the article is attacking BTC folks that brag about market cap...it covers all the basis - apples and oranges to compare to a real profit-producing company's market cap.

BTC (or any coin itself) is not a profit producing company. So what if BTC market cap is bigger than Citigroup's - a better comparison would be to compare to Citigroup's ASSETS...which is $1.8 trillion. For VISA, don't compare market cap, compare daily transactions (337k vs. 468 million) at a minimum.

Then comparing a coin market cap to national GDP figures (often done when folks argue a price cant go there) is "like comparing two random numbers".

When comparing bitcoin market cap to any established global financial institutions correctly, BTC is still a "small fry".

So, onward and upward XRP Market Cap!!!! The comparison to currency is also flawed because it often only considers physical notes in circulation - probably should consider total US denominated assets....$220 Trillion.

Some other TOTAL ASSET valuations of well known financial institutions:

JP Chase:  2.56Trillion

BofA: 2.28 Trillion

Wells Fargo $1.9 Trillion

 

Food for thought " courtesy @meegwell xrpchat.  

I thought this was relevant,  one of the best explanation of market cap I've read on this forum. :good:

Even ten at $10,000 at a 99 billion supply, you have 990 trillion of worth, which is not achieveable.

Edited by Archbob

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1 hour ago, Archbob said:

Even ten at $10,000 at a 99 billion supply, you have 990 trillion of worth, which is not achieveable

I have know idea what is achievable,  I'm certain Amazon founder was told many times " just sell books man " or do you wish you brought 10,000 bitcoin when it was a penny "scam coin they said , dont waste your money "  maybe painted the wall in facebook HQ an got shares instead of payment, what a fool that guy was  ( David Choe's shares now worth 200 million), there's many unachievable obstacles that have been conquered,  who knows where this is going. Good luck to us all.

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13 hours ago, 7Bs said:

Well I always thought art should be priced by its size, not it's beauty :)

But in all seriousness, market cap is really just a gauge for investors to decide whether an asset class is undervalued or overvalued. It's a perception mechanism of whether or not the rules of global wealth are being followed. Maybe it should be something along the lines of a capitalization rate which is really the yield of a property/real estate asset for any given time.

Hah, so the most valuable art in the world might be the Nazca lines - huge, and ugly.

I kind of agree regarding market cap, and I was not entirely non-serious to suggest doing away with this popular valuation scheme could be healthy for crypto in terms of price.  I went into this in another thread.  (One thing I didn't get into deeply there is the reliance on wash-trading current market cap values have.)

TL;DR: I don't necessarily see a ceiling for any crypto price, but I do think if we multiply price by supply and get a value orders of magnitude greater than all the wealth in the world, it's unlikely it's going to get up there.  The reason being that the major market participants (who set price), are performing and likely will always perform similar calculations themselves as a matter of course before making decisions.  I think it will take a major shift in current popular perception, for that ceiling to break.  

12 hours ago, WuWei said:

Here's the thing that strikes me about the potential for a sky-high price for xrp. It's not nearly as simple as saying that the total value of xrp is equivalent to some lofty "more than all the value of xyz companies, or some asset class."  This is a whole new dimension, in that this deals directly with the transfer of value. The "market cap" of xrp doesn't represent the total value of a company, but more significantly, it represents the carrying capacity of a cryptographic "tool." A cryptographic asset that was specifically designed to enable the nearly instantaneous transfer of money and value, world-wide!  This is an entirely new paradigm, and as such, if xrp truly becomes the major player at the core of the IoV, then $10K might one day not only be quite "reasonable," but it could actually be on the low side necessary to handle this task. It's the sum total of all the world-wide VALUE that chooses to use xrp as a means of transfer, that will ultimately determine it's price. And for those that like to say that it'll never happen due to the amount held back in escrow, I believe that it's prudent use by Ripple to further develop the network, to expand its use cases, to expand liquidity, and to promote philanthropy, will, over time prove to be a brilliant move that will ultimately help their idea come to fruition.  I'm not saying that Ripple will necessarily become the world-wide standard for moving value, but much like their analogy with the cargo container revolution of the shipping industry, if they succeed, it's gong to revolutionize the financial industry in ways that we've yet to imagine. As always.....we'll see.  

I love this argument. Thanks!

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