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Hynzie

Volume and usage

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3 minutes ago, bookworm said:

Spun differently ... assume 30% of the 20k FIs or about 7k make payments using XRP in 2020.  Out of the 60b supply, each would only have 9m XRP on average.  

Based on estimated $90b in 2020 per Izzy Otto (see XRP Valuation), each bank will settle about $13m (seems low?) so fair value may be $1.44 in 2020 or $0.83 in 2017.

Now the upside exists as this assume that all XRPs are freely available in perfectly liquid market with all FIs settling only $13m w/o any shortfall as shortages can be bought openly in the market.  Hmm, many VCs/insiders, staff and long term speculators (at least not me) will not freely sell their XRPs on the open market as is currently the case now.  

If we assume that 50% of the 60b XRP are not freely available in the market, we can derive a speculative fair price at twice of $0.83 at present value or $1.66 in 2017 ($1.44 x 2 = $2.88 in 2020) if XRP captures 35% market per Izzy and remarkably consistent with Kanaas' post (slide 8) of yesterday.

Is this taking the escrow into consideration?

Man... these figures are quite low. It's not a satisfying outlook.

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3 minutes ago, bookworm said:

Spun differently ... assume 30% of the 20k FIs or about 7k make payments using XRP in 2020.  Out of the 60b supply, each would only have 9m XRP on average.  

Based on estimated $90b in 2020 per Izzy Otto (see XRP Valuation), each bank will settle about $13m (seems low?) so fair value may be $1.44 in 2020 or $0.83 in 2017.

Now the upside exists as this assume that all XRPs are freely available in perfectly liquid market with all FIs settling only $13m w/o any shortfall as shortages can be bought openly in the market.  Hmm, many VCs/insiders, staff and long term speculators (at least not me) will not freely sell their XRPs on the open market as is currently the case now.  

If we assume that 50% of the 60b XRP are not freely available in the market, we can derive a speculative fair price at twice of $0.83 at present value or $1.66 in 2017 ($1.44 x 2 = $2.88 in 2020) if XRP captures 35% market per Izzy and remarkably consistent with Kanaas' post (slide 8) of yesterday.

Yes it's true that holders won't just sell at the first spike in price so a certain portion of XRP will be 'non-trading' and effectively out of the market. But the article does not appear to include the fact that each XRP can be re-used multiple times daily. So in your example above lets say the 30b XRP available can be re-used 100 times per day  (given 6 second close times for XRP this is I think conservative) - then your daily market available volume of XRP is 100 * 30b XRP.

This is what I can't get my head around?

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6 minutes ago, princesszerp said:

I'm not sure how another 1000% gain in the next year or two is grim? 

 

This is what I would be querying -  how can the value increase when supply will always significantly out-way demand. 

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You cannot use 100x per day since there are 7k counterparties with settlement on gross basis once per day (real time gross settlement).  Your logic would only work with only a handful of FIs who can perform payments thruout the day that is not how rtgs functions ie, batches are done once daily by end of day.  Izzy's paper is good in deriving the low bottom price but without the what ifs speculation (eg, consumer adoption, p2p, etc) and shortages.  Only 1b XRPs are sold monthly so thete will always be shortfalls esp for major FIs who settle hundreds of million daily ... central banks settle hundreds of billion daily so I have no comment on how they can acquire sufficient XRPs ...

Edited by bookworm

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27 minutes ago, Hynzie said:

I get what you mean - my point is that the close time for each transaction is so quick that demand would have to be truly enormous to increase the price significantly. So in your example someone wanting 'x' amount when only 'y' is available is highly unlikely when the total volume is currently 45 billion which can be re-used multiple times per day.  

Yes, true. But again this situation is if you take speculation completely out of the equation which will reduce the pool of available xrp.

I'm wondering if there are other factors that could further slow the recycling of xrps. I should look into how banks implement anti money laundering measures... I have no clue.

Edited by BlackRainbowFT

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49 minutes ago, teddybear said:

Hm... $1.43 by 2020?

I get the math he makes behind it, but... it seems very low, no?

Let's keep in mind that it is only his speculation of $1.43 according to bank use, what he didn't include was the value people like us bring to it which can't be calculated. 

Investors see xrp adopted by banks and becoming successful will drive the price up. 

Now if you'll excuse me im going back to looking at houses over 2.5 million for when xrp makes us all rich.

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54 minutes ago, teddybear said:

Hm... $1.43 by 2020?

I get the math he makes behind it, but... it seems very low, no?

How come a non institutional use case event like the opening of the Korean exchanges made the price increase 8 fold, but he just goes for a 7 fold increase of price assuming a quite vast adoption....

Scary...

Feels about right to me. I have never believed in those $100 dreams some people over here have. For an investment with a "relatively low" risk, 7x yield in 2 years time is not bad, is it? We keep on saying XRP is not like the other crytos, yet we are expecting the same price movements and yields???

You must see it as real value $1.43 + speculation value $x.xx.  Today we have real value $0.00 + speculation value $0.20

If cryptos become mainstream as an investment to the "normal" people, the speculation value could go up very much. Just consider how complicated it is to buy XRP today. But when big MM are in the game and liquidity is huge, it will be more difficult to influence the price by a relatively small buy or sell order. So, there is no way to estimate the $x.xx

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It's the $1.43 value i have concerns with.

That is based on a supply of 65b XRP to meet demand demand of 90b USD per day. But each XRP can be used multiples times per day, so the available volume of XRP daily is not static at 65b, but a multiple of how many times that XRP is transacted per day. The total volume of XRP available daily to meet the 90b USD of demand would then be significantly greater than 65b XRP.

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i'm reluctant to attribute any single 'thing' the title of 'herald' in the progression of our collective evolution.  the mechanisms for manifestation into our experience dictates that true causal points exist on a more subtle  (and for lack of a better word) 'energetic' dimension. 

this is what happens when you drink and blog

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See https://www.reddit.com/r/Ripple/comments/6irqhs/mathematically_speaking_what_is_the_highest_price/ and https://files.acrobat.com/a/preview/746e9c4d-b240-4ea5-95f0-9237f2cceb13 for other price predictions.

@mrenne_17, I agree ~$1.50 in 2 years time is a very good return.  However, if Ripple is able to fully realize their vision, I think $100 is possible in 3-5 years.

 

Edited by Sebastian

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