Is XRP Undervalued? New Model Suggests Fair Value of $3,541

XRP enthusiasts often say the token is undervalued. It is currently trading at $0.5126, but the Pipeline Flow Model, developed by Dr. Deon Bakkes, suggests a fair value for XRP of $3,541. This model combines economic and ecological concepts to estimate XRP’s potential market value, a figure that seems much higher than its current price.

The model looks at XRP’s role in global financial systems and considers possible price suppression factors, like legal battles and periodic sales by Ripple, which may have hurt its market performance.

Factors Behind Alleged Price Suppression

In 2017, XRP’s price increased by 60,000%, reaching a high of $3.31. But since then, its performance has lagged. Some people think price suppression is to blame. Ripple’s regular sales of XRP have been a focus, but the company denies these claims.

The long-running legal fight between Ripple and the SEC has also contributed to this belief. Some investors think regulatory pressure has artificially capped XRP’s price growth. Despite these obstacles, the Pipeline Flow Model offers a compelling perspective on XRP’s potential value if it is fully adopted.

The Pipeline Flow Model

The Pipeline Flow Model estimates XRP’s fair market value by comparing it to ecological systems. In this model, XRP’s payment rails are like pipes carrying value, with the token’s price representing the diameter of each pipe. As transaction volumes increase, the pipes must expand to handle the demand, leading to a rise in XRP’s price.

The circulating supply of XRP also affects its valuation, as it determines the total “capacity” for handling global transactions. The model says XRP’s fair value could increase dramatically, especially if a major event, like widespread adoption for foreign exchange (FX) transactions, increases demand.

Read also: XRP Market Cap Drops $5 Billion After Failing to Break Resistance

XRP’s Potential Fair Value

Based on different market scenarios, the Pipeline Flow Model estimates that XRP’s fair value could be around $3,541. This assumes peak transaction volumes, driven by high adoption rates and tighter supply.

However, this value is not a concrete price prediction. It shows a theoretical value if XRP is used globally. This fair value highlights the huge growth potential XRP may have if it is freed from current regulatory and market constraints. The model’s valuation suggests that XRP is undervalued by nearly 690,692%, showing how much its market value might increase if all obstacles were removed.