Kew Takeaways:
- Valhil Capital suggests that the SEC lawsuit significantly undermined the XRP price.
- According to the firm’s estimations and research, XRP value could stand between $12K and $22K a coin.
- The firm’s Managing Director, Jimmy Vallee, also thinks the government should buy out the entire XRP supply, but Ripple doesn’t take him seriously.
YEREVAN (CoinChapter.com) – The US Securities and Exchange Commission (SEC) famously sued crypto startup Ripple over the XRP token in Dec 2020, claiming the coin was an unregistered security. Despite the lawsuit, the XRP/USD exchange rate soared over 500% in early 2021, on the wings of the broader crypto rally, and declined 71% since Q2 2021, complying with the crypto downturn.
However, venture capital firm Valhil Capital conducted extensive research to prove the XRP value was “substantially” hurt by the lawsuit and determine the “fair value” for the token. Here are some of their findings.
XRP fair value is $12K-22K, says Valuation Whitepaper
The researchers asserted that XRP can function in two specific roles: “It can serve as money to enable transfers of value, and it can serve as a store of value.”
XRP adoption within the banking sector was curtailed due to the stigma and the concern that resulted from the SEC vs. Ripple lawsuit. […]The intent of the XRP valuation exercise was to quantify what the ecosystem would look like had the lawsuit not slowed down the the organic growth potential.
read the whitepaper.
Excluding two outliers on the lower and higher end of the potential price spectrum, the researchers concluded that the fair XRP value should have ranged from $3,500 to $22,000 a coin. Notably, the current token price stands at $0.52 in the New York session on June 8.
Meanwhile, the most whopping estimation of all participant researchers pinned the potential XRP price at an awfully specific $1 billion by 2062 without actually explaining how that can be physically possible.
Our empirical analysis (excluding outliers) reflects a set of values, that centers around a mean value of $12,000. The values between the mean and the median range between $12,000 and $22,000.
concluded the paper.
Researchers also asserted that it is difficult to determine how fast the XRP adoption would go. However, “the global financial system would benefit when the price of XRP is stable and high in value.” Notably, all analysts participating in the research had XRP investments, as the paper stated out front.
XRP buyback? Jimmy Vallee says YES
Jimmy Vallee, the chief of Valhil Capital, proposed the idea of XRP buybacks when the Valuation Whitepaper was still in the making.
Basically, the proposal calls upon governments to buy back the entire XRP supply from retail at an eye-popping price of over $35,000 a coin. The executive asserted that the crypto could be bought back if Ripple defeats SEC in court.
Understandably, his proposal was not met with much enthusiasm. Moreover, Ripple’s former director of developer relations, Matt Hamilton, called the endeavor a “complete fantasy.” He added that in no way the buyback makes “logical sense.”
Ripple’s CTO, David Schwartz, also dismissed the proposal.
I haven’t looked at it very closely. But what I have seen looks an awful lot like a scam to me. If we’ve learned anything from 2012 and 2022 it’s that anyone promising high returns with low risk is almost certainly going to rob you.
commented the CTO.
Also read: How do crypto exchanges register with the SEC? They can’t! Coinbase & Robinhood tried.
