Wells Fargo's Treasury Management officer Shannon Thorp presented an eye-catching price estimate for $XRP in a recent statement. The foresighted CEO predicts that the value of #XRP will rise to between $100 and $500 in the near term, namely during the next 4 to 7 months. This price growth forecast reflects a staggering 14,200% to 71,400% increase over the current market value.
Thorp recognizes the long-running discussion within the XRP community, in which one party relies entirely on Bitcoin's chart patterns and trends to make short-term price forecasts. Another group, on the other hand, stresses the usefulness of XRP, thinking that its partnerships and the replacement of old systems will be the primary drivers of its price. Thorp, on the other hand, offers a fresh viewpoint, highlighting that XRP is NOT a security and that basing price estimates on typical securities reasoning runs opposed to the Ripple team's initial intention.
Thorp expands on her reasoning by introducing the idea of Liquidity Strength (LS) as a critical indicator to examine when forecasting XRP's future value. To determine a price range for the token, she considers the entire supply, which includes circulation tokens, burned tokens, and tokens held by banks, governments, and people, and she believes Ripple has released all of its XRP from escrow.
According to Thorp, if one corporation owned all 100 billion tokens, its Liquidity Strength (LS) in the $1.00 to $5.00 price range would be $100 billion to $500 billion. Nevertheless, she claims that such a figure ignores prospective economic development, messaging and settlement operations, and the ongoing advantages of adopting XRP.
Thorp compares the token's potential to that of SWIFT, which processes around 44.8 million messages per day, using real-world examples. Even if Ripple could just take 30% of SWIFT's daily value, which she estimates at $7 trillion, it would result in an astounding $2.1 trillion in daily value for XRP (approximately 13.2 million messages). With XRP's fast settlement time of 1 to 5 seconds, liquidity would be present. Thorp, on the other hand, emphasizes the difficulty of completing big transactions with minimal Liquidity Strength, since it may need a major amount of a bank's XRP holdings.
Thorp considers all worldwide banks, incinerated XRP, individual holdings, XRP given to major banks and creators, and tokens accessible on liquidity hubs and exchanges to arrive at her price projection. She thinks that there are 50 to 75 billion XRP sustaining Liquidity Strength at any one moment (LS). When dispersed over 300 to 1000 different banks, liquidity providers, and governments, each institution would get around $75 million XRP/dollars.
Using J.P. Morgan as an example of a top-tier bank with a daily transaction volume surpassing $8 trillion, Thorp hypothesizes that even if Ripple grabbed 10% of this market, or $800 billion, the present 75 billion XRP in circulation would not be enough to transfer such enormous sums effectively. Thorp admits that this estimate only applies to cross-border transactions and excludes derivatives, real estate, CBDCs, technical parallels, and NFTs.
Thorp delivers her price prognosis after laying the framework, expecting XRP's price range to reach anywhere between $100 and $500 in the near future (4 – 7 months). Her computation is based on the Liquidity Strength (LS) scenario, which states that a $100 XRP price with a supply of 50 billion XRP results in an LS of $5 trillion, while $500 results in an LS of $25 trillion.
Thorp believes that this price offers the market breathing space, allows for expansion, and ensures that no one firm need billions of XRP to function on a daily basis. Additionally, Thorp thinks that a hypothetical "flip of the switch" event analogous to a re-evaluation for XRP, similar to how gold is valued, might spark this price spike.
Importantly, Thorp's prognosis sets an exciting scene for the future of XRP, while it is crucial to note that her projection is dependent on various assumptions that may or may not be realized. Anyone interested in investing should, as usual, undertake due research, examine many views, and make educated judgments.
