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btald1331

Is XRP past $1 plausible? Thoughts?

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I'm opening this discussion out of something I posted in another thread. I want to hear your opinions, suggestions to make my math better etc. 

Basing XRP in comparison to the current bitcoin price to judge possibilities in the future. Bitcoins total supply is a lot less than XRP. Bitcoin's supply is 21,000,000. XRP's is 100,000,000,000. Not accounting for the deflationary concept, that would mean your looking at a price around 21,000,000 BTC /100,000,000,000 XRP = .021%, or $2400 * .00021 = $.504. This purely math of the max supply of each currency. 

If you do the math off of the current circulating supply for a future prediction your looking at 16,353,025 BTC / 38,249,335,400 XRP = .042% or 2400 * .00042 = $1.008.

Not saying it won't go above $1, I believe it will. But in your opinion is it justified? 

Edited by btald1331

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eventually the amount of xrp decreases as more transactions are made the xrp fee gets burned out so it's definitely likely.

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No, at least not by this math.

The issue as I see it is we always seem to end up comparing perceived value of a crypto compared to BTC. BTC has no real recognized value outside speculation and energy consumption (which is in turn based on speculation demand).

IF XRP really takes off it wont be due to pure speculation, but rather by utility in its targeted market. An asset that saves billions is worth something (although always less than the savings). Lets say to be attractive XRP has to be 60% cheaper than current methods of settlement- then lets say it costs $0.001 to settle ever dollar (made up numbers here for illustrative reasons). XRP would be worth $0.0006 without limited supply. Factoring in supply: $197 billion is exchanged amongst business per day in Canada alone . At that rate all XRP would be used in very quick order, and that's only one medium sized economy country.

From that we can easily see the price of XRP increasing over time, especially as more countries, banks and use cases are developed.

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1 minute ago, KeBho said:

eventually the amount of xrp decreases as more transactions are made the xrp fee gets burned out so it's definitely likely.

Agreed, but the current rate would take many many years before a significant amount of XRP was dropped. The minimum drop is .00001. To put that in perspective it looks like 5.5 Million XRP have been burned since 2012. That would be about 1,100,000 a year at its current rate. So it would take 90,909 years to burn through the supply. We would need nearly 1,000,000,000 XRP a year burned to have significant effect in our life time. Is that plausible? I don't know. 

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1 minute ago, Mercury said:

No, at least not by this math.

The issue as I see it is we always seem to end up comparing perceived value of a crypto compared to BTC. BTC has no real recognized value outside speculation and energy consumption (which is in turn based on speculation demand).

IF XRP really takes off it wont be due to pure speculation, but rather by utility in its targeted market. An asset that saves billions is worth something (although always less than the savings). Lets say to be attractive XRP has to be 60% cheaper than current methods of settlement- then lets say it costs $0.001 to settle ever dollar (made up numbers here for illustrative reasons). XRP would be worth $0.0006 without limited supply. Factoring in supply. In Canada alone $197 billion is exchanged amongst business per day. At that rate all XRP would be used in very quick order, and that's one medium sized economy country. From that we can easily see the price of XRP increasing over time.

Make sense. 

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ok there's a simple test -- you have to first make an assumption

that assumption is XXX dollars need to be sent over the ripple network without moving the market

is $1m dollars in a single chunk reasonable or unreasonable?

if reasonable, go into bitstamp or gate hub and select an exchange (not trade) to buy $1m worth of xrp

then check the rate... it obviously is NOT the market rate, because you'd eat up the entire order book in seconds

what price and more importantly VOLUME does it take for $1m to be sent without moving the market?

maybe you think $1m is too much, or too little... well, do the math and projections from there 

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1 hour ago, CNFlinch said:

@JoelKatz likes to mention that Ripple looks for the opportunity in the tougher corridors.  I have a wild hunch, that possibly, as it conquers more and more of these corridors, the network effect will be that it will become the preferred choice in the easy ones as well.

Was always thinking the same. Looking at those "easy" corridors, one still sees a way to high spread in the rates. Of course banks and forex markets, loving those profitable spreads, will try to keep those corridors going. But future competition might force the rates down and ... competition will or can come from those players among FI's that are NOT in a position to participate in cherry picking on the present forex markets... and now there is an easy way to step into the arena of competitors .... thanks to RIpple AND XRP .....

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2 hours ago, btald1331 said:

Agreed, but the current rate would take many many years before a significant amount of XRP was dropped. The minimum drop is .00001. To put that in perspective it looks like 5.5 Million XRP have been burned since 2012. That would be about 1,100,000 a year at its current rate. So it would take 90,909 years to burn through the supply. We would need nearly 1,000,000,000 XRP a year burned to have significant effect in our life time. Is that plausible? I don't know. 

This is given based on the rate of utilization from 2012-Present.

Widespread adoption will multiply the burn rate. Market Makers will increase the value. Demand will increase the value. 

The lock-up will only allow 1 billion more/month to be exposed to the market for the next 55 months. If demand is only able to draw on what we have now, and people realize the traction that XRP will be gaining, and more use-cases are put forth....Nobody can accurately estimate the growth rate of the price, let alone the utilization.

Given the newly released plans to partner with more exchanges, fiat trading pairs, possible mobile payment applications, FOREx, and the cheapest/fastest payment rails....

It is up in the air, but the key takeaway is: UP.

 

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I'm not sure I can say that the current price of $0.30 can be justified.  Ripple is making traction with FIs but (based on public information) the numbers are minuscule compared to Swift's banking partners.  There is also a lot of people (maybe the majority) who are just buying them, hoping they will shoot up for whatever reason, and then sell them.   
However, once laws and regulations are in place dealing with how FIs can interact with XRP and XRP becomes a household name, forget everything you know.  A price of $1 or $10 would be ridiculous.  Try to imagine all of the world's value globally interconnected and underpinned by Ripple.  Then imagine that global value, much of which is often disconnected, trapped, illiquid being freed, utilized, mobile and growing.
[mention=30]JoelKatz[/mention] likes to mention that Ripple looks for the opportunity in the tougher corridors.  I have a wild hunch, that possibly, as it conquers more and more of these corridors, the network effect will be that it will become the preferred choice in the easy ones as well.
People talk of $100,000 Bitcoin.  Maybe.  But the first thing I always think about when looking at Bitcoin's possibilities is "who invented you?"  The second thing is "who's mining you?" Large scale FIs will always take issue with these things as well so you will never see real serious money.  What's a 40 billion market cap?  The U.S. spends over 500 billion a year on the military.  If real serious money takes advantage of Ripple, forget everything you know. 



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