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Hedge tip of the week - XRP

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https://www.hedge-crypto.com/wp-content/uploads/2017/09/Hedge-tip-of-the-week-v2-xrp.pdf

 

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Applying the 7.2% cumulative annual growth rate of the FX market, the total market capitalization of XRP is predicted to be USD 997.4 bn, with total XRP supply of 70 bn and the best-case scenario price of 14.2 USD. That being said, there is a real danger that the incumbents realize the threat and start behaving more competitively and regulators insisting in settlement in fiat-backed XRP IOU, in which case the value preposition of XRP is much lower, likely close to zero.

Below there is a sensitivity table presented with the proportion of inefficient FX corridors captured by XRP and total FX market cumulative annual growth rate. As observed, XRP, if it manages to accomplish its stated long term goal, has some value potential, which is, however, very variable and unpredictable.

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5 minutes ago, koryann said:

What a prediction based on nothing again 

It is not at all based on nothing. The things that people are shouting on this forum are based on nothing, for the largest part ($.25 by Wednesday, $100 in 2 years,...)

The calculations in the pdf document make a lot of sense to me. I actually find it a really good attempt to estimate the potential. The problem is that there are too many assumptions to make, which are impossible to estimate as we find ourselves in a completely new application. Such as the % of daily volume the MM need to hold, the inefficient corridors, or the amount of XRP banks or MM or the public is going to hold.

I would estimate the total value of XRP that MM need to hold much lower than 35%, as XRP settles within seconds, so with 1 USD worth of XRP you can settle many more transactions than with 1 USD, which is underway at least 24 hours in the traditional corridors. And I would estimate the free float (70m) much lower, because I think more XRP will be blocked by public and institutions. Growth rate could also be much higher, if new applications and new products are coming onto the market, but that could take more than 5 years as well. At the end, we may end up with the same numbers.

Of course, this is only the value related to the use of the coin for FX transactions. You still have to add the expectation / speculation value to that, which in the crypto-world could be huge.

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There opinion on XRP is not every bullish

Final remarks Foreign exchange and settlement market is as of now very inefficient, but it is a consequence of collussion rather than technical impossibility. If XRP starts threatening profitable FX corridors, the incumbents can quickly adjust their processes and/or regulators decide to issue fiat-backed XRP IOU. Future for Ripple Labs looks bright, not so much for XRP.

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12 hours ago, xourexe said:

Now shoe me a list of all coins that deflate over time

 

1 hour ago, BDXRP said:

There opinion on XRP is not every bullish

Final remarks Foreign exchange and settlement market is as of now very inefficient, but it is a consequence of collussion rather than technical impossibility. If XRP starts threatening profitable FX corridors, the incumbents can quickly adjust their processes and/or regulators decide to issue fiat-backed XRP IOU. Future for Ripple Labs looks bright, not so much for XRP.

I"ve sent XRP from one exchange to another and it was faster than anything else i've used.

The XRP supply deflates over time so I don't see how it can't be the best way to go. 

Cheaper than using anything else with Ripple and Ripple and XRP go hand in hand. SO no future for XRP then no future for Ripple either if thats the case which it most certainly is not.

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11 hours ago, Luschka said:

Estimating a Crypto price 5 years out is absolute rubbish. I don't care how good you think your math is.

Estimating it 6 months out is a damn near impossibility.

 

XRP is not just the average crypto. It is a crypto with an actual real use case, which can be calculated. The speculation part, of course, can not be calculated and may be more important than the actual real use value of the coin.

The thing is that it is just a little too early for a realistic estimation of the assumptions for the calculation. When banks start adopting the tech and using the coin, we'll know more.

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We do not know, primarily, what the network effect will be. We don't know how partners of partners will react to the tech. On some level we are hoping XRP will be the facebook to bitcoin's friendster and ethereum's myspace. There is resistance to new networks until trendsetters adopt the network as a medium of exchange.

But if I can draw this analogy out further, consider just how much facebook has diverged from its initial purpose.

Facebook began as a basement project to digitize the printed lookbook/facebook common in ivy league school. A facebook provided incoming freshmen with a name, face and dorm to facilitate social integration, find study partners, make fun of pictures, etc. Remember that facebook initially required an academic email address, allowed you to enter your residence hall information and class schedule and encouraged the creation of online study groups. Its massive initial growth came from the buy-in that it got from colleges and universities who viewed it as a productivity/e-learning platform.

Once network effect kicked in and folks who grew up in myspace determined that myspace was their high school locker and facebook was their college space (and now, incidentally linkedin is their professional space) facebook grew by leaps and bounds, but now it serves as primarily an entertainment revenue generating space for folks who fail to launch, need a distraction at their job and/or aren't looking to climb the corporate ladder, either because they are satisfied in their job or are parents and grandparents who view it as a legacy application to help them remember and celebrate the past. It's a glorified interactive photo album and journal for the vast majority of people, a marketplace for some, etc. A far cry from the original use case.

The point is, we simply don't know what kind of use cases Ripple will discover once network effect kicks in and the network and XRP get used in different ways. Articles that suggest XRP is a 'one trick pony' could have easily said the same thing about facebook, but the software platform, user interactions and suggestions and engineering vision drove the product to grow far beyond its initial value proposition (to the chagrin of universities who I'm sure felt that they have been 'had' to some extent as the use cases they signed up for were quietly removed).

This is incidentally what also attracted me (and others) to ethereum - it is another coin that should explode with network effect. The question is how long it will take to get there. I think it has lots of room to grow. Had I only had the cash back then when it was $12 - I'd have even more ripple today! :-D

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2 hours ago, mrenne_17 said:

XRP is not just the average crypto. It is a crypto with an actual real use case, which can be calculated. The speculation part, of course, can not be calculated and may be more important than the actual real use value of the coin.

The thing is that it is just a little too early for a realistic estimation of the assumptions for the calculation. When banks start adopting the tech and using the coin, we'll know more.

It cannot be estimated ... today ..... at all ...

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