Wells Fargo Treasury Manager predicts XRP will reach $500 in 7 months.

Wells Fargo Treasury Manager predicts XRP will reach $500 in 7 months.

The Future of XRP: Price Predictions and Market Insights

In a recent statement, Wells Fargo’s Treasury Management officer, Shannon Thorp, provides a bold prediction for the future value of XRP. Thorp envisions a potential surge in XRP’s price, reaching anywhere between $100 and $500 in the short term, specifically within the next 4 to 7 months. This projection represents a staggering increase of 14,200% to 71,400% from its current trading value.

Finding The Right Best Model

Thorp’s price prediction stems from a novel perspective that diverges from the traditional methods used by the XRP community. While some rely on chart patterns and trends exhibited by Bitcoin to draw short-term price predictions, others emphasize the significance of XRP’s utility and its partnerships as key drivers of its price. Thorp introduces a different approach, asserting that XRP is not a security and that using traditional securities logic to predict its price is counterintuitive to Ripple’s original vision.

To support her rationale, Thorp introduces the concept of Liquidity Strength (LS) as a pivotal metric when forecasting XRP’s future value. She takes into account the total supply of XRP, including circulating tokens, burnt tokens, tokens owned by banks, governments, and individuals, assuming that Ripple has released all their XRP from escrow.

According to Thorp, if one company were to possess all 100 billion XRP tokens, their Liquidity Strength (LS) in a price range of $1.00 to $5.00 would amount to $100 billion to $500 billion. However, she argues that this calculation fails to consider the potential growth in the economy, messaging and settling activities, and the continuous benefits derived from using XRP.

To illustrate this potential, Thorp draws on real-world examples, comparing XRP’s capacity to that of SWIFT, which handles approximately 44.8 million messages per day. Even if Ripple could capture only 30% of SWIFT’s daily value, estimated at $7 trillion, it would result in a staggering $2.1 trillion in daily value (roughly 13.2 million messages) for XRP. Considering XRP’s quick settlement time of 1 to 5 seconds, the liquidity required would indeed be present. However, Thorp highlights the challenge of conducting large transactions with limited Liquidity Strength, as it may require a significant portion of a bank’s XRP holdings.

XRP Price Prediction

To arrive at her price prediction, Thorp factors in various elements such as all global banks, burnt XRP, individual holdings, XRP distributed to large banks and creators, and tokens available on liquidity hubs and exchanges. She estimates that at any given time, there may be 50 to 75 billion XRP supporting Liquidity Strength (LS). When distributed across approximately 300 to 1000 different banks, liquidity providers, and governments, this would yield around $75 million XRP/dollars for each institution.

Considering J.P. Morgan as a top-tier bank with a daily transaction volume exceeding $8 trillion, Thorp postulates that even if Ripple captured only 10% of this market, which amounts to $800 billion, the existing 75 billion XRP in circulation would not suffice to move such massive sums efficiently. Thorp acknowledges that this estimation solely pertains to cross-border transactions and does not encompass derivatives, real estate, CBDCs, technical parallels, and NFTs.

With the groundwork laid, Thorp makes her price prediction, projecting XRP’s price range to be anywhere from $100 to $500 in the near short term (4 – 7 months). Her calculation is based on the Liquidity Strength (LS) scenario, where an XRP price of $100 with a supply of 50 billion XRP would yield an LS of $5 trillion, while $500 would result in an LS of $25 trillion.

According to Thorp, this valuation gives the market breathing room, allows for growth, and ensures that no single entity needs to hold billions of XRP to operate daily. Furthermore, Thorp believes that a potential “flip of the switch” moment could trigger this price surge, akin to a re-evaluation for XRP, similar to how gold is assessed.

It is important to note that while Thorp’s speculation sets an exciting stage for the future of XRP, her prediction is based on several assumptions that may or may not actualize. As with any investment, it is essential for individuals to conduct their due diligence, consider multiple perspectives, and make informed decisions.

At the time of writing, the XRP price stood at $0.7074.

XRP price further consolidates, 1-week chart Fig. 1: XRP price further consolidates, 1-week chart | Source: XRPUSD on TradingView.com

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