In an astonishingly bold forecasting, Wells Fargo’s head of treasury management Shannon Thorp laid out an optimistic outlook for the XRP crypto, the digital asset created by Ripple.
According to Thorp’s forecasting, the value of XRP could soar astronomically, potentially reaching between $100 and $500 in the short term, particularly in the next four to seven months.
Such forecasting of a price increase represents an incredible 14,200% to 71,400% increase from the current value.
Summary
Thorp’s bold prediction of the Ripple (XRP) crypto
Thorp’s approach to predicting the future value of XRP takes a novel perspective that departs from existing debates within the XRP community.
One side relies solely on the graphical patterns and trends exhibited by Bitcoin to derive short-term price predictions, while another emphasizes the importance of XRP’s utility and partnerships as major factors in its price.
However, Thorp introduces a new concept called Liquidity Strength (LS), which she believes is a key metric for forecasting the value of XRP.
Thorp argues that basing price predictions on traditional stock logic is counterintuitive to the original vision of the Ripple team, since XRP is not a stock.
Instead, she takes into account the total supply of XRP, including circulating supply, burned tokens, tokens owned by banks, governments, and individuals, while also assuming that Ripple has released all of its XRP from escrow.
Based on real-world examples, Thorp compares the potential of XRP to SWIFT, a global messaging system used by banks to handle about 44.8 million messages a day.
Even if only capturing 30% of SWIFT’s daily value, which she estimates at $7 trillion, XRP could reach a staggering daily value of $2.1 trillion (about 13.2 million messages), considering its fast settlement time of 1 to 5 seconds.
However, Thorp recognizes the difficulty of conducting large transactions with limited liquidity strength, as it could require a significant portion of a bank’s XRP holdings.
To arrive at his price forecast, Thorp takes into account various elements, such as all global banks, burned XRP, individual holdings, XRP distributed to large banks and originators, and tokens available on liquidity hubs and exchanges.
Shannon Thorp’s estimate
Her estimate leads to the conclusion that at any point in time there could be 50 to 75 billion XRP supporting Liquidity Strength (LS), distributed among about 300 to 1000 different banks, liquidity providers, and governments, worth about 75 million XRP/dollars per institution.
Considering J.P. Morgan as a top-tier bank with a daily transaction volume exceeding $8 trillion, Thorp speculates that even if Ripple captured only 10% of this $800 billion market, the current 75 billion XRP in circulation would not be enough to efficiently move such large sums.
Based on her calculations, Thorp expects the price of XRP to be between $100 and $500 in the short term (4-7 months). If XRP were to reach $100 with an offering of 50 billion tokens, the LS would be $5 trillion, while $500 would result in an LS of $25 trillion.
Thorp believes this valuation enables growth, ensures market breathing room and eliminates the need for a single entity to hold billions of XRP to operate on a daily basis.
The author speculates that a potential “flip of the switch” moment could trigger this price surge, similar to a revaluation of XRP, comparable to how gold is valued.
At the time of writing, XRP is priced at $0.69, which makes Thorp’s prediction all the more surprising should it come true.
However, it is crucial to remember that the cryptocurrency market is highly volatile and subject to rapid changes, so investments should be approached with caution and a long-term perspective.
